Saudi economy shrank 3.8% in fourth quarter - preliminary data

The economy of the world's top oil exporter contracted by 4.1% in 2020

  
Image used for illustrative purpose. A view shows buildings and the Kingdom Centre Tower in Riyadh, Saudi Arabia, January 1, 2017.

Image used for illustrative purpose. A view shows buildings and the Kingdom Centre Tower in Riyadh, Saudi Arabia, January 1, 2017.

REUTERS/Faisal Al Nasser

DUBAI - Saudi Arabia's economy shrank by 3.8% in the fourth quarter compared with the same period a year earlier, preliminary government data showed on Wednesday, but it grew 2.8% on a quarterly basis.

The “flash estimates” for quarterly gross domestic product by Saudi Arabia’s General Authority for Statistics did not have a breakdown on how the oil and non-oil sectors performed in the three-month period to the end of December.

The economy of the world's top oil exporter contracted by 4.1% in 2020, according to the preliminary estimates, hit by the COVID-19 pandemic, lower crude prices and output cuts.

The government had previously forecast a 3.7% annual contraction for 2020.

London-based Capital Economics said in a note this month it expected Saudi economic output to shrink 4.8% in the fourth quarter as the non-oil sector struggled.

"Timely activity indicators suggest the non-oil sector slowed in the final few months of 2020. Point of sale transactions and ATM withdrawals remained weak, private sector credit growth eased in December," it said in a note.

"This is likely to have been more than offset the rise in oil output over Q4, although the year-on-year rate – which is what matters for GDP growth – remained deeply negative."

Saudi Arabia will publish final GDP data on March 16, the statistic authority said.

(Reporting by Davide Barbuscia; Editing by Kim Coghill) ((Davide.Barbuscia@thomsonreuters.com; +971522604297; Reuters Messaging: davide.barbuscia.reuters.com@reuters.net))

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