G20 economies expand 3.3% in third quarter, led by Saudi Arabia

Kingdom's economy expanded 9.3% on annual basis, driven by higher oil prices

The Riyadh skyline. Saudi Arabia outpaced the growth of the G20 economies in the third quarter of 2022. Reuters

The Group of 20 major economies expanded by 3.3 per cent on an annual basis in the third quarter of 2022, led by Saudi Arabia where a rally in oil prices fuelled the Gulf country's growth.

The gross domestic product of the kingdom, the world's top oil-exporting country, grew an annual 9.3 per cent in the three months to the end of September, according to the data released by the Organisation for Economic Co-operation and Development on Tuesday.

Brent, the benchmark for two thirds of the world’s oil, soared to a near 14-year high of $140 per barrel following Russia’s invasion of Ukraine in February. Although crude oil has given up most of its gains this year, prices are once again nearing the $80-mark amid optimism about a recovery in China’s oil demand.

Saudi Arabia's economy grew by 8.8 per cent in the third quarter of 2022 from the same period a year ago, exceeding initial estimates, driven by a sharp rise in both oil activities and non-oil activities, the latest government statistics showed.

Growth in the Arab world's biggest economy during the three months to the end of September was higher than the 8.6 per cent third-quarter flash estimate released at the end of October, according to the latest data by General Authority for Statistics (Gastat).

Oil-related activities in the kingdom grew 14.2 per cent year-on-year in the three-month period and non-oil activities boosted GDP by 6 per cent on an annual basis, Gastat said.

Compared with the second quarter of 2022, Saudi Arabia's output rose 2.6 per cent in the third quarter of this year, OECD data showed.

On an annual basis, Australia and Indonesia followed at 5.9 per cent GDP growth each, India with 5.7 per cent, Mexico with 4.3 per cent and Turkey with 4 per cent, the data showed.

The GDP of G20 countries accounts for about 80 per cent of the world's economic output and is a bellwether of the global economy. The GDP of OECD countries represents about 45 per cent of the global economy.

On a quarterly basis, GDP in the G20 area rose 1.3 per cent in the third quarter of 2022, according to provisional estimates, after shrinking by 0.3 per cent in the second quarter.

The recovery in the G20 bloc in the third quarter mainly reflected a rebound in China, as some of the country’s strictest Covid-19 lockdowns began to ease.

China’s GDP grew by 3.9 per cent quarter-on-quarter after contracting by 2.7 per cent in the second quarter of 2022.

The US economy also recovered with GDP growing by 0.7 per cent in the third quarter after contracting by 0.1 per cent in the previous quarter, driven by net exports, the OECD said.

Together, China and the US contributed four-fifths of the 1.3 per cent growth in the G20 area in the third quarter.

GDP growth also recovered in South Africa (1.6 per cent) and India (0.8 per cent) on a quarterly basis.

Despite the recovery in the G20 area as a whole, Japan's economy shrunk by 0.2 per cent, the UK by 0.2 per cent and Turkey by 0.1 per cent in the third quarter of this year compared to the previous quarter.

GDP growth lost momentum in the third quarter in the eight remaining G20 economies, slowing the most in relative terms was Brazil (0.4 per cent, compared with 1 per cent growth in the previous quarter).

The slowdown was more moderate in Australia, Canada, Indonesia and Mexico on a quarterly basis, according to the OECD.

In the third quarter of 2022, GDP in the G20 area exceeded its pre-pandemic (fourth quarter of 2019) level by 6 per cent.

The UK was the only G20 country that had not yet recovered its pre-pandemic level, following revisions to the historical series, the OECD said.

In the 38 countries that make up the OECD, including a dozen G20 countries, GDP growth remained weak at 0.4 per cent quarter-on-quarter.