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Dubai – The Saudi economy has experienced the strongest economic growth in the fourth quarter of 2018 since the beginning of 2016 due to the expansion of the oil sector, while the growth of the non-oil sector was slow, revealed statistics of the statistical agency.
Fourth quarter GDP increased 3.59% over the previous year. In the third quarter, annual growth was 2.5%.
"The oil sector led the recovery in the last quarter, reflecting increased production, particularly at the beginning of the quarter," said Monica Malik, chief economist at Abu Dhabi Commercial Bank.
Depends on oil
The Saudi economy has suffered in recent years due to low oil prices and austerity measures to reduce the budget deficit. In 2017, the economy has contracted for the first time since the global financial crisis, almost ten years earlier. Data released on Sunday showed how much the kingdom's economic recovery still relies heavily on oil production.
While the oil sector grew by nearly 6% year-on-year, growth in the non-oil sector – essential to Saudi Arabia's efforts to diversify its economy – was 1.8%, down from 2.1% in the third quarter of 2018.
"We expect moderate growth in total growth in 2019 as Saudi Arabia will implement cuts in oil production," Malik said.
Saudi Arabia's economy grew by 2.21% in 2018, according to government data released in January, without breaking down the fourth-quarter figures.
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