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RIYADH: ¶¶Òõ¶ÌÊÓƵ is expected to grow by around 10 percent in 2022, well above the current consensus expectations of 6.3 percent, according to a recent report by Capital Economics.

The economic research consultancy attributed future growth to the expected rise in oil sector output and the likelihood of a more relaxed fiscal policy in the Saudi economy.

¶¶Òõ¶ÌÊÓƵ's economy expanding at the fastest rate in a decade

¶¶Òõ¶ÌÊÓƵ’s economy expanded by a robust 2.2 percent quarter-on-quarter in Q1, which translates into year-on-year growth of 9.6 percent, the fastest rate since 2011, according to the report.

This expansion resulted from a rise in output from all sectors, but was mainly driven by a sharp rise in the oil sector which grew 2.9 percent over the quarters, reported the General Authority for Statistics.

¶¶Òõ¶ÌÊÓƵ continued to increase oil production in accordance with the OPEC+ deal, with last year’s 1 million barrel per day output cut creating favorable conditions that led to a boost in output by 20.4 percent.

Oil production in ¶¶Òõ¶ÌÊÓƵ was 10.3 million bpd in March, which translated into a growth of 26.7 percent year-on-year. 

It also marked the fastest pace recorded since 2003, said Capital Economics in another report released in April. 

Non-oil sector plays pivotal role in ¶¶Òõ¶ÌÊÓƵn economy

The non-oil sector saw a growth of 2.5 percent as the economy continues to move toward being fully reopened after the COVID-19 pandemic. 

A previous report from Capital Economics also noted that the non-oil sector has rebounded strongly since the omicron wave ended in January 2022.

Last year’s advancement in the fourth quarter also led Capital Economics to forecast a robust growth rate for this year. Interestingly, the growth in the fourth quarter of 2021 was largely led by the non-oil sector which rose 4.9 percent. 

Point of sales transactions rose from 2.1 percent 3m/3m in March to 5.0 percent over the first half of April. Furthermore, mobility declined only slightly in the country since the start of the holy month of Ramadan.