Saudi Arabia’s gross domestic product (GDP) fell 3% in the first quarter of 2021. The oil sector is read to be behind this decline due to its sharp fall.
According to a statement of the General Authority for Statistics of Saudi Arabia on Monday, the non-oil sector of Saudi Arabia grew 2.9%, from the 1.6% growth a year earlier. In comparison, the oil sector of Saudi Arabia declined by 11.7%, which was a significantly more dramatic drop than the 4.6% decline a year ago. Also, the released data indicated that the private sector in Saudi Arabia grew by 4.4 percent in the first quarter, while the government sector shrank by 0.4 percent.
Quarterly, real GDP fell by 0.5%, owing to an 8.7% contraction in the oil sector, while the non-oil sector grew by 4.9%, owing to a 6.3% private sector expansion and a 1.7% increase in the government sector to the fourth quarter.
In May, the General Authority estimated that the economy would shrink %3.3 in the first quarter, and for the first time since 2020, the non-oil sector grew.
The twin shocks of last year’s unprecedented oil price drop and the COVID-19 outbreak have caused damage to the Kingdom’s economy. Last year, the real GDP of Saudi Arabia dropped by 4.1%. However, according to the International Monetary Fund, the Saudi economy is expected to rise by 2.1% this year.