Saudi economic growth in Q2 reflects positive outlook for recovery in 2021: Capital Economics

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The growth of 1.1% in Saudi economy during the second quarter of 2021 was less than Capital Economics' forecasts but signals a strong start to Q3 2021.

The research firm added that the growth boosts positive outlook for Saudi economic recovery during the second half of 2021.

"With the OPEC+ impasse now resolved oil production will be raised further and remaining virus restrictions are being relaxed, the economic recovery looks set gather pace over the second half of the year," Capital Economics said.

It expects that the increase in oil output during August will contribute to supporting the recovery in the oil sector until the end of 2021 and next year.

More than 50% of the Saudi citizens were vaccinated against COVID-19, which promoted the easing of procedures, especially in the tourism sector.

Saudi Arabia’s gross domestic product (GDP) rose by 1.5% year-on-year (YoY) by the end of Q2 2021, data issued by the General Authority for Statistics (GASTAT) showed.

The seasonally adjusted real GDP increased by 1.1% quarter-on-quarter (QoQ) in Q2 2021, Argaam reported.

Capital Economics recently upgraded its forecasts for the Saudi economy from 2.2% to 4.8% in 2021, and from 4.1% to 6.3% in 2022.