Dubai: Saudi Arabia's economy grew in the fourth quarter of last year, the fastest pace since the beginning of 2016 in connection with the expansion of the oil sector, while the non-oil growth was sluggish, data statistics agency showed on Sunday.
In the fourth quarter gross domestic product grew by 3.59 per cent compared with a year earlier. In the third quarter of the annual increase of 2.5 percent.
"The oil sector led the recovery in the last quarter, reflecting a stronger production, especially in the beginning of the quarter," said Monica Malik, chief economist at Abu Dhabi Commercial Bank.
The Saudi economy has suffered in recent years due to low oil prices and austerity measures aimed at reducing the huge budget deficit.
In 2017, the economy contracted for the first time since the global financial crisis almost a decade ago.
"We expect that the rate of headline growth to moderate in 2019 in Saudi realizing a reduction in oil production," said Malik.
Saudi Arabia's economy grew by 2.21 percent in 2018, government data showed in January, Sun decaying figures of the fourth quarter.
Last week, the state Saudi Aramco announced that it has agreed to buy a controlling stake in Saudi Basic Industries Corp. (SABIC) of Saudi sovereign wealth fund, the Investment Fund of the public (PIF), for $ 69.1 billion.
The deal could boost economic growth, as the sovereign fund gets more firepower to pursue its plans to create new jobs and diversify the economy of the Greater Arab oil exports.
Dubai Arqaam Capital said in a research note on Sunday the acquisition is expected to increase credit growth ", as corporate activity to increase the momentum of the premium continues to improve, especially towards the end of the year, and possibly for loans from Aramco, to finance the purchase of SABIC '.
Malik said, economic growth in 2019 will be influenced both PIF invests.
"Our assumption is that the sale will boost SABIC PIF investments in the second half of the year," she said.