Saudi Arabia’s economy grew 1.66% in the first quarter, in line with expectations of a modest pick up as oil production cuts weigh on the world’s top crude exporter, Trend reports citing Reuters.
The Saudi oil sector grew 1% in the first quarter, government data showed on Sunday. This was almost twice the rate reached in the same period a year ago but a massive slowdown from the previous quarter, when the oil sector grew by almost 6% year-on-year.
The Organization of the Petroleum Exporting Countries (OPEC) and its Russia-led allies agreed in December to slash oil production by more than the market had expected.
On Sunday, Saudi Energy Minister Khalid al-Falih said the cuts would most likely be extended by nine months.
This is expected to weigh on oil sector growth this year, while non-oil sector growth is likely to pick up slightly, on the back of a boost in government spending.
Non-oil sector growth in the first quarter was 2.13%, largely in line with the same period last year, but up from a 1.8% growth in last year’s fourth quarter.
Non-oil activity picked up particularly in the private sector, which saw a growth of 2.3%.
In 2017, the economy shrank for the first time since the global financial crisis almost a decade earlier, but last year it grew at a pace of 2.21%, buoyed by strong oil sector growth.
The IMF said last month real non-oil growth is expected to strengthen to 2.9% in 2019, boosting overall economic growth to 1.9%, higher than its earlier projection of 1.8%.
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