World

Saudi Arabia economy shrinks 4.6% after oil sector hits snag

Saudi Arabia’s economy shrank more slowly in the third quarter as the government eased some coronavirus restrictions but the pandemic-hit oil sector continued to weigh on the broader economy, official data showed on Thursday.

The economy shrank 4.6% in the third quarter, rebounding slightly from the 7% slump in the previous quarter but marked by declines in both the oil and non-oil sectors, the data showed.

Saudi Arabia is facing its worst economic decline in decades after the Covid-19 pandemic curbed global crude demand and measures to contain it also hurt other sectors.

The world’s largest oil exporter said on Tuesday it expects the economy to shrink by 3.7% this year but to swing back to growth of 3.2% next year.

“This negative growth originated mainly from the contraction in the oil sector by 8.2% and a negative growth rate of 2.1% recorded in the non-oil sector,” the General Authority for Statistics said on Thursday about the third quarter data.

The private sector, the main focus in Crown Prince Mohammed bin Salman’s plans to diversify the economy away from oil, shrank by 3.1%, while the government sector grew by 0.5%.

By Reuters

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