0151 GMT July 23, 2018
According to Bloomberg, the kingdom’s gross domestic product shrank one percent from the same period a year earlier, when it expanded 0.9 percent, according to official data released on Saturday. The economy had contracted 0.5 percent in the first three months of 2017.
Crown Prince Mohammed Bin Salman is leading the push to transform the biggest Arab economy at a time when crude prices are at about half their 2014 peak. But as authorities seek to reduce the kingdom’s reliance on oil, they’re also leading efforts among OPEC members and some other major producers to bolster prices by cutting output. The kingdom’s oil GDP shrank 1.8 percent in the second quarter, weighing on overall activity.
The data also showed how non-oil industries are still struggling with efforts to overhaul the economy and shore up public finances. The non-oil GDP, the main engine of job creation, expanded below one percent, driven mainly by the government sector, the data showed.
Monica Malik, chief economist at Abu Dhabi Commercial Bank, said, “What we’re seeing is stagnation in non-oil activity “Second-quarter data show still very lackluster demand” even after the government reversed a decision to cut or freeze bonuses and allowances for state employees.
Figures released by the government’s statistics agency also show:
A Bloomberg survey conducted before Saturday’s release show economists expect growth to grind to a halt this year, compared with a growth forecast of 0.5 percent in the previous poll.