Saudi Arabia's economy grew by nearly six percent in the third quarter, driven by the Gulf kingdom's non-oil sectors, Jadwa Investment has said.
It said the latest economic growth data released confirms that the "healthy performance" of the Saudi economy continued into Q3.
In real terms - adjusted for price movements - the economy grew by 5.87 percent in the third quarter of 2012.
"This strong performance was mainly driven by a solid growth in the non-oil government sector," Jadwa said in a report.
At 5.87 percent, year-on-year growth in the third quarter was higher than the 5.5 percent GDP expansion in the second quarter, Jadwa said.
Compared to Q2 when the private sector was the main growth driver, Q3 saw the government contribution jump compared to the previous quarter.
Jadwa said the overall non-oil public sector expanded by 12.2 percent year-on-year. Most of this growth was sourced from higher government services which expanded by 13.4 percent year-on-year.
Jadwa said: "While such strong performance reflects improved government services, it is also surprising that this growth occurred in the third quarter where economic activity tends to be slower relative to the rest of the year.
"We, however, expect this expansion in services to translate into higher non-oil revenues for the government budget which is due to be released within the next two weeks."
The transport and communication sector was the next fastest growing sector at 8.7 percent year-on year, followed by utilities and construction which both registered solid growth of 8.4 percent and 8.1 percent respectively.
Jadwa said it expected the construction sector to register even stronger growth in Q4 alongside the retail sector.
The manufacturing sector growth rate slowed to the lowest level for which data is available in Q3, expanding by 2.5 percent year-on-year.
According to the latest data from the Joint Oil Data Initiative, Saudi oil production contracted by 2.3 percent quarter-on-quarter in the third quarter.
Jadwa said year-to-date growth in Saudi Arabia was in line with its forecasts at 5.8 percent.
"We expect the economic performance to be mixed in the fourth quarter. On the one hand, oil production is likely to remain at the current level with a downside risk which will limit the year-on-year growth rate. On
the other hand, we expect both government and private sectors to maintain their solid performance which will push growth upward."For all the latest business news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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