Riyadh - Mubasher: The Saudi Arabian economy will continue to expand in 2018, on the back of higher oil output amid high oil prices along with the improvement in the non-oil sector, according to Al Rajhi Bank.
Al Rajhi Capital Research said in its Saudi Monthly Economic Report on Wednesday that recovery in the private sector will underpin the government’s efforts to create additional jobs and help improve employment rate among Saudi nationals in the coming quarters.
Saudi Arabian economy has continued to expand for the second consecutive quarter with at the fastest pace in the last six quarters, driven by improvement in non-oil sector, accounting for around 84% of the kingdom’s gross domestic product (GDP) growth in the second quarter of the year.
The non-oil sector growth was led by the government services, financial services and manufacturing segments.
In addition, higher oil prices, due to geo-political concerns and tight supply expectation, further aided the economic expansion in the second quarter.
However, muted capital spending by the government continued to impact Saudi builders, as reflected by contraction in the construction sector in Q2-18, the report noted.
Weaker consumer spending on non-essential items, which is attributed to the introduction of the value added tax (VAT), along with the exodus of expats, mostly due to dependent fees, also impacted the wholesale and retail trade, restaurants, and hotels.
