Saudi Arabia: The economy weathers falling oil prices well in Q2
August 31, 2015
GDP expanded 3.8% in Q2 over the same quarter last year, which represented an acceleration over the 2.3% increase tallied in Q1 (previously reported: +2.4% year-on-year). The print overshot the 3.0% increase that FocusEconomics panelists had expected and marked the fastest growth in five quarters. The acceleration observed in Q2 mainly reflected a healthy expansion in the oil-related sector (Q1: +1.8% yoy; Q2: +5.1% yoy), while non-oil industries recorded a mild improvement (Q1: +3.0% yoy; Q2: +3.1% yoy).
Growth in the agriculture sector slowed to 1.0% in Q2 (Q1: +1.2% yoy), while dynamics in the manufacturing sector accelerated to a 4.0% expansion (Q1: +3.3% yoy). Activity in mining and quarrying, which include the all-important crude and oil sectors, rose 4.8% in Q2, marking a strong acceleration over the 1.6% increase in Q1. Despite falling oil prices, the economy is benefiting from the strong crude supply, which is reaching historically high levels. In the services sector, growth in financial services picked up in Q2, while dynamics in domestic trade and the construction sector decelerated.