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Saudi private sector achieves highest growth in 5 years

Saudi private sector achieves highest growth in 5 years
Private sector contribution to GDP increased to 41.9% in Q3

Riyadh – Mubasher: The Saudi private sector maintained growth in 2019, supported by government initiatives to raise its contribution to the Kingdom’s gross domestic product (GDP) in line with the goals of Vision 2030.

During the third quarter (Q3) of last year, the Saudi private sector achieved its highest growth since 2014, growing by 4.22% and achieving its highest GDP value at SAR 272.63 billion.

This growth helped Saudi non-oil growth record its highest growth rate since Q3-14 at 4.33%, as shown by the data of the Saudi General Authority for Statistics (GaStat).

Private sector contribution to GDP also increased to 41.9%, with the non-oil economy contributing 57.7% in Q3-19.

The Saudi GDP registered SAR 651.4 billion by the end of September 2019, compared with SAR 653.37 billion during the corresponding period in the year before.

“The private sector growth came on the back of a number of positive factors, from diversifying finance resources through industrial and agricultural funds and the fund of funds, as well as the unlimited support to small and medium-sized enterprises (SMEs),” economic expert Saud Al Mateeri told Mubasher.

Al Mateeri further expects the Saudi Public Investment Fund (PIF), the Saudi sovereign wealth fund, to partner with the private sector as the main drive of the Saudi economy in coming years, expecting better growth rates in 2020.

Meanwhile, economic expert Hashim Al Fahmawy believes the Saudi private sector was impacted in 2016 by the decline in oil prices globally, which also affected the petrochemicals sector. After that, as crude prices recovered in 2017 the sector returned to growth.

In 2018, the Saudi government revealed a number of projects, such as the Neom and the Red Sea developments, which is positively reflecting on the private sector, Al Fahmawy added, expecting the private sector to grow by 9% during 2020.