Saudi Arabia’s economy shrank for a fifth straight quarter as it reduces raw production

Saudi Arabia’s economy shrank for a fifth straight quarter as the kingdom reduced raw production to meet its promises to OPEC, though the non-oil sector – the powerhouse of job creation – exhibited symptoms of development.

Gross domestic product shrunk 4.6% in the third quarter linked to the same period of last year, as per the statistics authority. In line with most other nations, that was an increase from a 7% contraction between April and June as the most serious consequences of the coronavirus pandemic carried off.

The oil economy dropped 8.2% – the largest decline since at least the start of 2011, as OPEC, controlled production to prop up prices. Brent crude has grown to about $51 a barrel since the cuts started, but the global benchmark is still lower at 22% this year.

The non-oil sector lost less cloud. It decreased by 2.1%, contrasted to 8.2% in the second quarter, as the government loosened virus limitations and businesses constantly opened.

The overall figure was somewhat more serious than an expected contraction of 4.2% published by the statistics body last month, which didn’t involve a disruption by sector.

The world’s largest oil exporter is suffering a dual pressure this year as the pandemic and more inexpensive energy prices distort its finances and the private sector.

The kingdom pumped an average of 8.8 million containers a day between July and September, down from 9.3 million in the prior quarter and 9.4 million a year earlier.

While OPEC+ – an alliance between the Organization of Petroleum Exporting nation's and others such as Russia – commenced its cuts in May, Saudi Arabia’s second-quarter production figures were skewed by its record output in April during a skimpy price war.

The enhanced non-oil performance indicates a partial return to normalcy for businesses in the Arab world’s biggest economy. Officials haven’t forced any new limitations since May, and the country – which has had more chronic cases of the virus than anywhere in the Middle East aside from Iran and Iraq – has so far eluded another wave of viruses.