The economy of Saudi Arabia contracted 3.3% in the first quarter, compared to a year earlier, Reuters reported. Largely this was due to oil output cuts, but at the same time, the non-oil economy expanded 3.3%, recovering from the pandemic, according to estimates from the Saudi government.
The Saudi Arabia’s General Authority for Statistics stated that the non-oil sector recorded an increase for the first time since 2020’s first quarter. The largest economy in the Arab World is on its path to rise 2.1 percent in 2021 after its dip of 4.1 percent last year.
The plummeting trend during 2020 was caused by the combined forces of the lower oil prices and the global pandemic. The newest data displays that the total GDP in the first quarter recorded a decline of 12 percent in the continuous cuts of crude oil production that was previously agreed between Russia and OPEC.
According to Crown Prince, Saudi Arabia is making attempts to bolster the non-oil sector with a multi-trillion dollar spending push that requires all country companies to reduce dividends which are usually paid to the government, therefore boosting capital spending.