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Investing.com -- Saudi Arabia’s economy experienced growth in the first quarter of the year, bolstered by the non-oil sector. This comes as the kingdom continues efforts to diversify its economy away from hydrocarbons.
The country’s real gross domestic product (GDP) saw a year-on-year increase of 2.7% in the first quarter, according to preliminary estimates by the government’s statistical authority released on Thursday.
Fahad al Dossari, President of the General Authority for Statistics (GASTAT), attributed this growth to a strong local demand for more details, statistics, and data. Non-oil activities, a key factor in this growth, rose by 4.2% in the first quarter. Additionally, government activities also saw a growth of 3.2%.
Monica Malik, chief economist at Abu Dhabi Commercial Bank, noted that private sector activity remained solid, reflecting progress with the investment program. She highlighted a significant quarterly increase in government activity, likely fueled by a relatively supported oil price in the first quarter.
However, Malik anticipates a possible pullback in government spending from the second quarter due to a sharply lower oil price, which could potentially dampen government activity for the rest of the year.
The report also showed a 1.4% decrease in oil activities during the quarter.
Earlier this month, the International Monetary Fund revised its forecast for Saudi Arabia’s GDP growth in 2025. The new prediction is a 3% increase, down from a January estimate of a 3.3% increase.
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