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Saudi finance minister says non-oil sector grows with economy gradually recovering from pandemic

RIYADH: The Saudi economy is witnessing a gradual recovery since mid-2020, reflected in the positive growth rates of the non-oil sector, Minister of Finance Mohammed Al-Jadaan said at the Financial Stability Conference on Thursday.

The real non-oil sector growth amounted to 8.4 percent in the second quarter of 2021, led by the private sector, which recorded a growth rate of 11.1 percent, Al-Jadaan said.

Preliminary estimates for the third quarter of this year show that the real private non-oil GDP grew by 6.2 percent, he said. This led to promising results in the public finance performance, he added. 

Al-Jadaan indicated that parts of the Saudi economy have also crossed the pre-pandemic stage, especially with regard to levels of consumption and private investment, which are now much higher than they were before the Covid-19 outbreak.

He added that those sectors related to travel are still suffering from the effects of the pandemic.

The sources of growth depend on economic diversification.

Faisal Al Ibrahim, Saudi minister of economy and planning

Also speaking at the conference, Faisal Al-Ibrahim, minister of economy and planning, said Saudi Arabia now has two challenges: targeting economic diversification, and deepening financial markets to support this diversity.

“We have a very high governance in the financial markets, which in turn do not need more depth, but in order to prepare ourselves for the required diversity,” he added.

In the third quarter of this year, the Kingdom witnessed a 120 percent rise in exports financed by banks, which gave Saudi Arabia a push forward from structural and financial policies aimed at increasing economic diversification, Al-Ibrahim pointed out.

Al Ibrahim argued that that the sources of growth depend on economic diversification and this requires empowering, linking and attracting private sector investment to sectors that have been able to export products and services that are highly competitive and do not depend on the value added by oil.

With regard to the Saudi economy, he said that the Kingdom had entered a period of economic recovery compared to last year.

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