Saudi Arabia’s economy shrinks by 4.6% in the third quarter after its oil sector is hit

DUBAI (Reuters) – Saudi Arabia’s economy contracted more slowly in the third quarter as the government eased some pandemic restrictions, but its pandemic-hit oil sector continued to weigh on the broader economy, official data showed on Thursday.

Data showed the economy contracted 4.6% in the third quarter, rebounding slightly from a 7% contraction in the previous quarter, but marked by declines in both the oil and non-oil sectors.

Saudi Arabia is facing its worst economic crisis in decades after the Covid-19 pandemic curbed global oil demand and measures to curb it also hurt other sectors.

The world’s largest oil exporter said on Tuesday that it expects its economy to contract by 3.7% this year but return to growth at 3.2% next year.

“This negative growth is mainly due to the contraction of the oil sector by 8.2% and the negative growth rate of 2.1% recorded in the non-oil sector,” the Central Statistical Office reported on Thursday on third-quarter data.

The private sector, the focus of Crown Prince Mohammed bin Salman’s plans to diversify the oil-based economy, contracted by 3.1%, while the government sector grew by 0.5%.

(Reporting by Yousef Saba; Editing by Ana Nicolaci da Costa)