Saudi nominal GDP grows 15.2% in Q2

Monday, 1 November 2010 20:44 - - {{hitsCtrl.values.hits}}

Saudi nominal GDP maintained its robust growth in the second quarter, increasing by 15.2 percent against the same period a year earlier, according to the latest data from Jadwa Investment.

Inflation adjusted real GDP growth data is not yet available, but Jadwa maintains its forecast for full-year real Saudi GDP growth at 3.9 percent.

The Riyadh-based finance house said that although nominal growth was down in comparison to the 34.1 percent growth in the first quarter, an increase in oil revenues had led to 24.1 percent growth in the second quarter.

Growth in the non-oil private sector dropped from 6.7 percent in the first quarter to 6.2 percent in the second.

A sustained programme of government spending led to the construction and utilities sectors posting a strong performance in the second quarter, rising by 8.4 percent and 7.9 percent, respectively.

Elsewhere, telecoms growth stayed healthy, boosted by the provision of mobile and broadband applications. Telecoms is combined with transport in the GDP data; the sector saw growth of 6.5 percent in the second quarter.

Agriculture and retail were amongst the weakest performing sectors.

“We had not anticipated that retail would be one of the weakest performing sectors in the second quarter,” the report stated.

“Given the indications of strong consumer spending (point of sale transactions were up by 33 percent and cash withdrawals from ATMs up by 14 percent over the same period), the slowdown in growth in the retail sector, to 3.6 percent from 8.8 percent in the first quarter, is puzzling.”

Jadwa predicted that third-quarter data would show a slowing of the non-oil private sector due to relative business inactivity during Ramadan, saying that growth would remain at around its current levels.