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Saudi Arabia’s Q3 GDP grows 8.6% boosted by higher oil prices

Architecture, Building, Tower Thomson Reuters/Tom Brenner
The finance ministry reported revenues of SAR 301.87 billion in the third quarter of 2022, a rise of 24% year-on-year

Saudi Arabia’s gross domestic product expanded by 8.6 percent in the third quarter compared with the same period in 2021, according to initial government estimates on Monday, as the world’s top oil exporter benefits from higher energy prices.

Growth was largely driven by a 14.5 percent increase in oil activities, the General Authority for Statistics said, while non-oil activities expanded 5.6 percent.

Second quarter real gross domestic product was up 12.2 percent, the kingdom reported in September, exceeding a flash estimate at the end of July of 11.8 percent growth on the back of higher oil prices.

The finance ministry separately reported on Monday Saudi Arabia’s fiscal figures for the third quarter.

It recorded revenues of SAR301.87 billion ($80.14bn), a rise of 24 percent from the same period a year earlier.

Expenses rose 22 percent to SAR 287.73bn in the third quarter, compared with the year earlier period.

It reported a budget surplus of SAR 14.14bn for the third quarter, and oil revenues of SAR 229.02bn.

Although revenues and expenses were higher year-on-year, there was a slight pullback compared with the second quarter, with revenues of SAR 370.36bn and expenses of SAR 292.46bn.

“The fiscal surplus narrowed in Q3 in quarterly terms on the back of lower revenue, both oil and non-oil, and despite a modest pullback in government spending from the Q2 level,” said Monica Malik, chief economist at Abu Dhabi Commercial Bank.

“Nevertheless, Saudi is in position to realise a healthy fiscal surplus in 2022 with a strong yearly increase in oil revenue,” Malik said.