Saudi economy on path to recovery amid gradual oil price rise

CountrySaudi Arabia

Saudi Arabia’s GDP fell 3.9 per cent y-o-y in the fourth quarter of 2020 as compared to 4.6 per cent y-o-y in Q3, indicating a recovery of the kingdom from the pandemic, according to Al Rajhi Capital, a leading provider of financial services in the kingdom. Further, it is expected to do better this year, as oil production improved gradually from 7.53 million bpd in June last year to 8.15 mbpd in February 2021 amid a recovery in oil prices, it stated. The oil sector’s GDP contracted by 8.5% y-o-y and the non-oil sector by 0.8% y-o-y. On the other side, non-oil GDP should also recover as the hospitality, retail, and entertainment sectors are mostly back to normal operations, it added. Further, S&P Global Ratings affirmed Saudi Arabia’s sovereign credit ratings at ‘A-/A-2’ with a stable outlook. The credit rating agency said that the Saudi economy will likely to return to positive growth in 2021 after the contraction seen in 2020. more...