Saudi economy posts 1.2% growth in Q3; 4.2% annual contraction

Saudi economy posts 1.2% growth in Q3; 4.2% annual contraction

GaStat said that Saudi Arabia’s GDP posted a quarterly growth of 1.2% in the third quarter of 2020. While compared to the second quarter of the same year. However, the GDP growth witnessed a contraction of 4.2 percent year-on-year.

The GaStat said that for the first time the rapid quarterly GDP estimates are being published. This is to provide timely information about the Saudi economy to decision makers and beneficiaries.

The authority stated, in its report on Tuesday; that its rapid estimates showed a decrease of 4.2 percent in the Kingdom’s constant-price GDP in the third quarter of 2020. This is in comparison to the same quarter of 2019.

It noted that the seasonally adjusted GDP recorded a positive growth of 1.2 percent in the third quarter of 2020; compared to the second quarter of the year.

Seasonal adjustments are a discretionary process through which seasonal effects; and the impact of work and calendar days are out from the original data. Therefore, seasonally adjusted data do not contain any impact resulting from the season effect, calendar effect and working days.

It is a statistical technique designed to even out periodic swings in statistics or movements. This is in supply and demand related to changing seasons. These provide a clearer view of non-seasonal trends and cyclical data that would otherwise be overshadowed by the seasonal differences.

Peak of coronavirus spread

Previous data from GaStat showed that the Kingdom’s constant-price GDP decreased by about seven percent. This is during the second quarter of 2020 as this quarter witnessed the peak of the spread of coronavirus.

The pandemic caused closures not only at the level of the Kingdom but also at the global level; reflected in the global trade movement and the growth of the economy.

SAMA stated, in a previous report, that the Saudi economy cannot be separated from global economic events. It expected that the pandemic and the resulting global recession would negatively affect the Saudi economy.

However, the strong measures taken by the Saudi government institutions have the ability to withstand the impact and mitigate the negative effects.