Saudi GDP grows 9.9% in first quarter, beating flash estimate

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The Kingdom Centre Tower is seen in Riyadh, Saudi Arabia. Reuters

Saudi Arabia’s gross domestic product (GDP) grew 9.9 per cent in the first quarter, the fastest in a decade and more than a flash estimate last month of 9.6 per cent, official data showed on Tuesday.

It was the fastest expansion since the third quarter of 2011 with the increase in oil production a key factor, said Monica Malik, chief economist at Abu Dhabi Commercial Bank.

“This growth is due to the high increase in oil activities by 20.3 per cent,” the General Authority for Statistics said.

GDP growth was 2.6 per cent higher than in the fourth quarter on a seasonally-adjusted basis, while oil activity was up 2.9 per cent on a quarterly basis.

Crude petroleum and natural gas activities were the highest contributor to GDP at 32.4 per cent, the statistics authority said.

Non-oil activity rose 3.7 per cent, or 0.9 per cent from the previous quarter. Government activity increased by 2.4 per cent year-on-year, but declined 0.9 per cent from the fourth quarter.

“All economic activities recorded positive annual growth rates in the first quarter of 2022,” the General Authority for Statistics said.

Wholesale and retail trade, restaurants and hotels activities grew by 6.3 per cent from a year earlier, while exports grew by 22.1 per cent, the data showed.

GDP per capita of 26,961 riyals ($7,187) in the first quarter of 2022 was up 33.8 per cent from the corresponding 2021 quarter.

“The underlying data still points to a healthy pace of expansion in the non-oil sector,” Malik said.

“Saudi is in a very strong position, given the limited global oil capacity and the high oil prices.”

Saudi Arabia and other OPEC+ states agreed to bring forward oil production rises to offset Russian output losses as a result of Western sanctions for Moscow’s invasion of Ukraine, which it calls a “special military operation”.

In April, the International Monetary Fund upgraded top oil exporter Saudi Arabia’s economic growth outlook to 7.6 per cent in 2022, citing higher oil output and prices, from 3.2 per cent in 2021.

Meanwhile Saudi Arabia aims to triple foreign tourism this year as pandemic restrictions ease, Hajj pilgrims return and the first elements of the crown prince’s signature projects open, its tourism minister told AFP on Sunday.

The kingdom inaugurated tourist visas in September 2019, just months before the coronavirus pandemic decimated the industry globally.

An uptick in domestic travel in 2020 and 2021 — authorities tallied a record 64 million “domestic visits” last year — helped save the nascent Saudi tourism sector from collapse, and now authorities want to seize more of the international market, Ahmed Al Khateeb said in an interview.

“Now we are pushing and moving to attract more… international visitors,” he said, specifying the goal for this year was 12 million, up from 4 million in 2021.

“We are back and we are very optimistic. Countries started to open their borders, restrictions started to ease down and people started to travel,” he said.

Saudi Arabia has raised eyebrows with its goal of attracting 100 million visitors by 2030, an element of Crown Prince Mohammed Bin Salman’s Vision 2030 reform agenda intended to diversify the oil-dependent economy and open up to the world.

Khateeb specified on Sunday that of the 100 million targeted visitors for 2030, 30 million are meant to come from abroad while the rest would be people travelling within Saudi Arabia.

Some 30 million visits will be religious trips by both residents and foreigners, largely to Makkah and Medina, Islam’s two holiest sites.

Next month authorities plan to allow one million pilgrims to perform the hajj, after two years in which the coronavirus pandemic forced drastic limits on numbers for the annual ritual.

Another high-profile feature of the tourism push is so-called giga-projects spearheaded by Prince Mohammed, including the $500 billion futuristic megacity known as NEOM and Diriyah, the seat of the first Saudi state which is being redeveloped as a heritage and entertainment destination.

A restaurant district in Diriyah is set to open in September, while other elements of such projects will come online “from 2025 onwards”, Khateeb said.

“This is a new level of tourism which does not exist today,” said Khateeb who sits on the board of NEOM.

“Saudi Arabia will change the tourism landscape globally… the destinations that Saudi will offer by 2030, it’s something completely different,” he added.

Deals at ATM: The pavilion of the Kingdom of Saudi Arabia has concluded its participation in the Arabian Travel Market 2022 (ATM), held in Dubai recently.

Under the Saudi Tourism Authority (STA), 29 partners succeeded in highlighting the treasures of Saudi tourism, and its diversity, depth and tremendous opportunities, in addition to the success in re-communicating and confirming the commitment with the tourism industry and major international companies, by holding more than 4,000 meetings and concluding more than 90 partnership agreements and Memoranda of Understanding.

Agencies



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