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Today's Paper | December 20, 2024

Published 31 Jul, 2022 11:05pm

Saudi GDP climbs nearly 12pc in 2nd quarter on oil gains

Saudi Arabia’s year-on-year economic growth hit nearly 12 per cent for the second quarter, led by a surging oil sector, the government’s statistics agency said Sunday.

The Middle East’s largest economy has benefited from a spike in oil prices triggered by Russia’s invasion of Ukraine, and has largely resisted appeals from Western countries to raise output in order to bring prices down.

Growth in the second quarter was 11.8pc compared to the same period last year, according to initial “flash” estimates published by the General Authority for Statistics.

“This dynamic growth was mainly due to the increase in oil activities by 23.1pc,” the agency said.

Non-oil economic activities grew by 5.4pc and government services grew by 2.2pc compared to the second quarter of 2021, it said.

The Ukraine war and the resulting rise in crude prices has been a boon to oil-producing states like Saudi Arabia, the world’s biggest crude exporter whose gross domestic product is expected to grow by 7.6pc in 2022, according to the International Monetary Fund.

As the war got underway, Saudi Arabia and the United Arab Emirates stressed their commitment to the OPEC+ oil alliance, which Riyadh and Moscow lead, underscoring Riyadh’s and Abu Dhabi’s increasing independence from long-standing ally Washington.

US President Joe Biden, who once vowed to make Saudi Arabia a “pariah” over human rights abuses, visited the kingdom earlier in July, drawing criticism from human rights activists for greeting Crown Prince Mohammed bin Salman with a fist bump.

Oil was on the agenda during Biden’s meeting with Saudi leaders and during a subsequent summit of regional leaders, but the visit ended without any agreements to raise production.

The OPEC+ group is to meet on Wednesday.

The main US contract, West Texas Intermediate crude, surged by more than five percent on Friday to rise back above $100 per barrel.

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