Saudi Press

Saudi Arabia and the world
Sunday, May 11, 2025

Saudi economy rebounds in 2021 after turbulent year

Saudi economy rebounds in 2021 after turbulent year

The Saudi economy recovered in 2021 after a tough year of pandemic restrictions as vaccination campaigns rolled out in the Kingdom and across the world driving its key oil exports.

MENA’s largest economy bounced back from last year, when the Kingdom’s gross domestic product contracted by 4.1 percent, according to the International Monetary Fund.

But this year saw higher oil output, its first quarterly budget surplus in over two years and lower unemployment drove growth.

Some economic data in 2021 even bettered pre-pandemic levels, although the full effect of the latest omicron variant is yet to be played out.

Here are the Kingdom’s economic key highlights this year:

First quarter: Oil exports lift


The value of oil exports continued its rebound in the first quarter of 2021, rising for the third consecutive quarter and hitting the highest level since the final quarter of 2019, according to official data.

However, in all four quarters of 2021, the Kingdom’s oil exports were lower when compared to the corresponding periods in 2019.

Second quarter: Unemployment eases


Oil and non-oil exports grew by an annual rate of 123 percent and 61 percent in the second quarter by value, respectively, according to the General Authority for Statistics. These were the highest annual growth rates for both categories since at least 2018.

In June, the value of Saudi Arabia’s oil exports increased by 123 percent to SR61.5 billion ($16.4 billion) from a year ago, said GASTAT.

Oil exports accounted for 72 percent of total exports in June, up from 62 percent in the same month last year, it added.

The unemployment rate among Saudi nationals fell to 11.3 percent in the second quarter, the lowest since at least the same period in 2016, said GASTAT, attributed to ongoing government efforts to boost local employment in the private sector.

By contrast, Saudi unemployment had hovered at a mean rate of 13.7 percent in 2020.

The third quarter: Budget surplus and falling inflation


The value of oil exports hit SR206.6 billion in the third quarter, the highest since the final quarter of 2018, as the sector enjoyed rising demand and higher prices.

This led the Kingdom’s GDP to jump by 7 percent in the period, the highest annual rate since 2012. Oil and non-oil output surged by 9.3 percent and 6.3 percent, respectively.

The Ministry of Finance added that the Kingdom recorded its first quarterly budget surplus since the first quarter of 2019. The surplus was valued at SR6.7 billion, reversing a SR4.6 billion deficit in the previous quarter.

The upswing was driven by multiyear high crude prices and government social spending cuts, as the pandemic eased.

In August, the annual inflation rate in the Kingdom hit its lowest level in 20 months, reaching 0.3 percent. Rises in consumer prices in the second half of the year slowed as the effects of the VAT hike from 5 percent to 15 percent in July 2020 faded.

The inflation rate in June 2021 had been 6.2 percent, which tumbled to 0.4 percent in July.

The Saudi private sector experienced its strongest growth in September since 2015, according to IHS Markit, driven by new orders and higher output. Shoppers received a boost following the easing of lockdown restrictions, driving growth.

Back in 2020, Saudi Arabia’s annual inflation rate averaged 3.4 percent, driven by the VAT rise.

Also, the budget deficit hit SR293.9 billion in 2020, rising more than two-fold compared to 2019. Spending on social benefits, subsidies and grants were all raised, at the height of the pandemic.

The fourth quarter: More oil production


Saudi oil exports and production in October hit their highest levels since April 2020, according to data published by Jodi. Oil shipments lifted 5 percent on the previous month to 6.83 million barrels per day. Fuel production rose to 9.78 million bpd, only slightly higher than in September, but this was 9 percent up on a year ago.

Forecasts for 2022


The outlook for the Saudi economy next year is favorable, according to government and economic forecasters.

The Ministry of Finance expects a 2022 budget surplus of SR90 billion as revenues are set to grow by 12.4 percent compared with estimated revenues for this year. Spending is expected to narrow by 5.9 percent. This will give the Kingdom its first fiscal surplus since 2013, if achieved.

The ministry forecasts that the economy will grow by 7.4 percent next year.

Capital Economics has a similar forecast of 7.3 percent, saying that oil production will push up the Kingdom’s output in 2022.

The GCC Statistical Center, Jadwa Investment as well as Capital Economics expect Saudi Arabian inflation in 2022 to settle at between 1 and 2 percent as last year’s VAT rise continues to ease.

Newsletter

Related Articles

Saudi Press
0:00
0:00
Close
Trump's Upcoming Visit to Gulf Nations: Investment and Security at the Forefront
Cardinal Robert Prevost Elected as Pope Leo XIV, Marking a Historic Papacy
India-Pakistan conflict may be first test for Chinese military tech
Bill Gates Announces Plan to Wind Down Philanthropic Foundation and Disperse Wealth
Common Sense Returns to Britain's Legal System: UK Supreme Court Declares a Woman Is… a Woman
Warren Buffett to Step Down as Berkshire CEO After Nearly 60 Years
Trump Shares AI-Generated Image of Himself as… Pope, Prompting Outrage Reaction
Amazon Launches Satellite Internet Service Amidst Competition with SpaceX
The Rush to the White Gold: Global Investment Surge in Natural Hydrogen Exploration
Trump Administration Removes National Security Adviser Mike Waltz Amid Signal Chat Controversy
Liverpool Clinches Record-Equalling 20th English League Title Under Arne Slot
Massive Explosion at Iran's Bandar Abbas Port Linked to Suspicious Chemical Shipments
Pope Francis Laid to Rest in Rome as World Leaders Attend Funeral
Not Child’s Play: How Competitive Gaming Became a Global Economic Empire
California Surpasses Japan to Become the World’s Fourth-Largest Economy
Former U.S. Congressman George Santos sentenced to eighty-seven months for wide-ranging fraud
Israel Considers Limited Strikes on Iran's Nuclear Facilities Amid Diplomatic Efforts
Saudi Arabia Offers Max Verstappen Unprecedented Deal to Join Aston Martin
Global Pistachio Shortage Amid Rising Demand for 'Dubai Chocolate'
IMF Predicts No Global Recession Amid Trade Tensions
Worldwide Markets Decline as U.S.-China Trade Frictions Intensify
OpenAI Lands Unprecedented $40 Billion Investment
Removing the Political Adversary is Dismantling What's Remaining of Turkey's Economy.
Ex-FIFA President and French Football Icon Acquitted of Corruption Allegations
White House Investigates Security Breach After Journalist Accidentally Added to Secret Yemen Strike Chat
Volunteers in Jeddah Ensure No One Goes Hungry During Ramadan Iftar
New Restaurant Opens in Makkah's Iconic Clock Tower for Ramadan Iftar
Saudi Arabia's Project Masam Removes 552 Houthi Mines in Yemen
Saudi Arabia Fines Over 400 Foreign Trucks for Regulatory Violations
Saudi National Campaign for Charitable Work Reports Significant Donations in Ramadan
Historic Al-Hosn Al-Asfal Mosque Restored in Asir as Part of National Heritage Initiative
KSrelief Expands Humanitarian Efforts in Syria, Sudan, and Lebanon
Saudi Arabia Advocates for Global Water Cooperation at Forum
Madinah Governor Tours Islamic Arts Biennale in Jeddah
Saudi Foreign Minister in Cairo to Lead Meeting on Gaza Developments
Recognition of Saudi and Pakistani Entrepreneurs at Riyadh Ceremony
UAE Announces $1.4 Trillion Investment Plan in the United States
Saudi Arabia Innovates in Soil Quality and Water Conservation
Governor of Taif Engages with Rose and Aromatic Plants Cooperative
Saudi Food and Drug Authority Enhances Preparations for Hajj Season
Saudi Arabia Distributes Aid to Yemen and Romania
Restoration of Historic Al-Qalaah Mosque in Riyadh Underlines Heritage Preservation Efforts
Saudi Arabia Arrests Over 25,000 for Immigration Violations in One Week
UAE’s ADQ and Energy Capital Partners Announce $25 Billion Energy Venture in the U.S.
KSrelief Launches Extensive Ramadan Food Aid Initiative
Ramadan Celebrations Revitalize Historic Jeddah
Makkah Authorities Urge Worshippers to Follow Crowd Management Guidelines
Direct Flights Between Dammam and Damascus Reestablished for Syrian Residents
Saudi Main Index Rises to Close at 11,760 Amid Mixed Market Performance
Moroccan Prime Minister Aziz Akhannouch Visits Prophet's Mosque in Madinah
×