Saudi economy contracts despite non-oil boost during summer

New Bloomberg analysis shows 2% pick-up in non-oil sector during July and August
Saudi economy contracts despite non-oil boost during summer
By Staff writer
Thu 05 Oct 2017 01:19 PM

Growth in Saudi Arabia's non-oil sector picked up in July and August but the overall economy contracted, according to Bloomberg.

Bloomberg Intelligence Economics' new monthly series of Saudi GDP showed the kingdom’s non-oil growth at 2 percent year-on-year during the two summer months.

The model makes use of monetary and financial variables such as real ATM cash withdrawals, money supply growth, points of sales transactions and bank clearings of cheques.

The first analysis in the series has found that annual growth in all of these has increased in July and August, compared with the second quarter of this year.

If this growth persists at this rate until the end of the year, the non-oil sector will show an average expansion of 1.3 percent in 2017.

However, this is not large enough to turn overall growth positive. The strain from the oil sector has deepened in July and August, according OPEC statistics. The Bloomberg Monthly GDP indicator shows the kingdom’s economy contracted by about 0.8 percent in July and August compared to last year.

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