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Saudi GDP contracted 3.3% in Q1, the governmental body says

In comparison to last year, the Saudi economy shrank 3.3% in the first quarter of 2021, the General Authority for Statistics in Saudi Arabia announced.

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On Monday, the General Authority for Statistics in Saudi Arabia issued a statement regarding the economic outlook of the Kingdom in the first quarter of this year. According to the statement, Saudi Arabia’s economy contracted 3.3% in the first quarter comparing the same period of the last year. The cuts in oil production were the main factor behind this fall.

On the other hand, the non-oil economy in Saudi Arabia showed growth for the first time since the first quarter of 2020, according to the statement. It was stated that recovering from the impacts of the pandemic, the non-oil economy expanded 3.3%. In the same period, government services also achieved a growth of 0.3%, the official body reported.

Recently, the International Monetary Fund (IMF) reported that Saudi Arabia’s economy is expected to grow 2.1% in 2021. Last year, the Saudi economy shrank 4.1% due to the economic repercussions of the COVID-19 pandemic and lower oil prices.

As part of Saudi Vision 2030, Saudi Arabia is trying to boost the non-oil sector. In this sense, Saudi Crown Prince Mohammed bin Salman previously announced that the Public Investment Fund (PIF) would inject at least $40 billion into the local economy each year through 2025.

During his interview with the state-run news agency, the Crown Prince also announced that Aramco, a Saudi oil giant, is negotiating with Chinese firms to sell its 1% share. Similar to previous sales, the amount which would be raised from this transaction is expected to be transferred to the PIF to use in diversifying the Saudi economy away from oil.

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