Rising oil prices and a surge in the non-crude sector jolted the Saudi economy back to life in the first quarter of this year, according to reports, as economists and analysts say the worst might be over for the Kingdom after enacting tough but needed economic reforms.
The Kingdom’s GDP grew for the first time in 5 quarters, notching a 1.2% increase in Q1 2018. The end to the worst slowdown for Saudi Arabia since the 2008 financial crisis may be in sight. The non-oil economy grew 1.6 percent from 1.3 percent in the previous quarter, Bloomberg reports.
The oil sector grew by 0.6% in the first quarter of 2018 compared to a 4.3% drop in the same quarter in 2017.
A strong non-oil economy is seen as crucial to the success of Crown Prince Mohammed Bin Salman’s blueprint to wean the kingdom from its reliance on income from crude exports — a feat rarely accomplished by large commodity producers, according to Bloomberg.
Authorities said they expect non-oil GDP to expand 3.7 percent this year.
Government services and financial services sectors also played a role in the non-oil sector growth, according to Al Bawaba. Specifically, government services sector grew by 3.4% compared to 3.2%, while financial services sector grew by 2.1% compared to 0.8% for the same period in 2017. The growth in both sectors is expected to continue rising due to listing the Saudi stock market in the MSCI as well as implementation of financial sector program initiatives.