Saudi Arabia’s non-oil economy reaches the highest level in four years

Saudi Arabia’s non-oil economy reaches the highest level in four years

Saudi Arabia’s non-oil economy, especially private sector, grew in October at the fastest rate since August 2015 as new activities increased at their highest pace in four months, a survey showed on Tuesday.

Adjusted HIS Markit’s Purchasing Managers Index (PMI) rose in Saudi Arabia, in light of seasonal factors to 57.8 in October from 57.3 in September, any reading above the 50-level known to indicate growth

The results suggest that Abqaiq–Khurais attack on two Saudi oil facilities in September did not affect the wider economy.

Production continued to accelerate, expanding at the fastest rate in 22 months, supported by higher demand, which is considered the main source of growth from the domestic market.

Growth this year rose to its highest level since 2018 due to fuel price increases and the introduction of a 5 percent VAT.

Amritsal Verdi, an economist at HIS said: “At current levels, the PMI indicates GDP growth at an annual rate of around 4%, which will mark a significant acceleration in growth since the beginning of 2019”.

Riyadh expects a real GDP growth of 0.9 this year as oil production cuts limit the rise of the non-oil economy.

According to the survey, employment in Saudi Arabia’s non-oil economy continued to grow in October, but at a modest pace.

Verdi added that employment slowed down from September as companies remained cautious about recruiting additional staff.

Average prices in October fell at the fastest rate since April as survey participants announced price cuts to attract customers.