Saudi Arabia’s economy posted a 1.8% annual growth figure for the second quarter but the non-oil sector lost steam, according to official gross domestic product (GDP) estimates shared in a Reuters report on Monday.
On a quarter-on-quarter basis, the Saudi economy grew 0.6% compared to the first three months of the year, with the oil sector fueling the growth as demand rebounded and prices increased.
According to the report, the GDP segment comprising wholesale and retail trade, restaurants and hotels, grew 16.9% in Q2 compared to the same quarter last year, although declining slightly when compared to the first three months of this year.
Saudi Arabia pursued a strategy that combined tough restrictions and rules during the pandemic that prioritized safety despite the economic cost. Once vaccines were made available in the Kingdom, officials encouraged everyone to get a jab, then began to re-open the economy. In July, the Kingdom re-opened to visitors again.
Now Saudi Arabia is pursuing a strategy that all but forces citizens and residents to get vaccinated, prohibiting the unvaccinated from entering public places and even returning to work. Bloomberg recently called Saudi Arabia among the worst places in the world for so-called anti-vaxxers.
The pent-up demand that boosted the rebound was expected to lose some steam, economists told Reuters:
“Preliminary GDP data for 2Q2021 released in August points to some moderation in the pace of sequential non-oil GDP growth. This normalization is to be expected as the boost to activity from the initial reopening of the economy, trapped spending and pent-up demand wanes,” Monica Malik, chief economist at Abu Dhabi Commercial Bank, said in a note last week.
