Saudi Arabia's economy expands as private sector activity accelerates

Kingdom's economy grew 1.6 per cent in first quarter compared to 1.3 per cent in same period last year

The Saudi Arabian economy has expanded 1.6 per cent in the first quarter from the same period last year. Reuters

Saudi Arabia's economy expanded in the first quarter compared to the prior-year period, boosted by non-oil sector growth, as private sector activity accelerated to its highest rate since 2016, according to official government data.

The kingdom's economy accelerated by 1.6 per cent in the first three months of 2019 compared to 1.3 per cent in the same period last year, the Riyadh-based General Authority for Statistics said on Sunday.

"Real non-oil GDP growth, which best reflects economic activity on the ground, strengthened marginally," Monica Malik, chief economist at Abu Dhabi Commercial Bank, said in a note on Sunday.

Saudi Arabia is boosting spending this year as it seeks to stimulate its economy amid wide-sweeping reforms to reduce its reliance on oil.

The non-oil sector grew 2.13 per cent in the first quarter of 2019, up from 2.09 per cent in the prior-year period.

The private sector grew 2.3 per cent during the period compared to 1.7 per cent a year ago, boosted by government measures to create jobs and attract foreign investments as part of the kingdom's Vision 2030 plan to overhaul the economy.

Saudi Arabia's construction sector returned to growth, expanding 1.2 per cent in the first quarter compared to a contraction of  2.4 per cent in the year-earlier period.

The oil sector grew just over 1 per cent, up from 0.5 per cent a year ago as oil prices rose.

Saudi Arabia, Opec's biggest oil producer and the world's largest crude exporter, is backing a plan to extend global oil output cuts up to the first quarter of 2020. Russian president Vladimir Putin has indicated his support for the extension among Opec+, the alliance grouping Opec and oil-producing members outside the organisation that is led by Russia.