Saudi Arabia’s economy has shrunk by 7% while unemployment has risen to record highs Sa Saudi Arabian News

Saudi Arabia's economy has shrunk by 7% while unemployment has risen to record highs Sa Saudi Arabian News

According to official data released on Wednesday, Saudi Arabia’s Arab economy shrank by 7% in the second quarter of the same quarter a year ago.

The oil sector, the world’s largest crude exporter, fell 5.3 per cent from April to June as the coronavirus epidemic hit this year, weakening global demand for crude.

The losses were exacerbated when the state’s de facto leader, Crown Prince Mohammed bin Salman (MBS), launched an oil price war in which the global benchmark crude crash in April saw prices fall below 20 20 a barrel. Were gone.

The UK’s non-oil sector – whose growth is the key to MCS’s key ambition to get rid of fossil fuel revenues – fell 8.2 percent in the second quarter as business activity stalled due to the lockout.

The bans are coming back as global benchmark crude prices have risen above 40 40 a barrel due to a dispute among the world’s top producers, although they are still 40 percent lower than at the beginning of the year.

And oil prices are well below 76 76.01 a barrel. The International Monetary Fund says Saudi Arabia needs to balance its state budget this year.

The state gets about 80 percent of its oil.

Saudi Arabia’s Arab unemployment rate peaked at 15.4 percent in the second quarter. Analysts say it will be difficult to recover from the hit, thanks to budget deficits and pay cuts that weaken government spending, including a three-fold increase in value-added tax (VAT) to 15 percent. .

Tightening the bandwagon will inadvertently hit Saudi homes with a large chunk of their disposable income. And when income after taxes dwindles, people spend less – which can be an attraction for economic recovery.

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In a note to clients on Wednesday, Jason Tovey, an economist at Emerging Markets in Capital Economics, wrote: “Although the situation has begun to tighten, tightening of wages in recent months means that recovery will weaken. .

IMF The economy is expected to grow at 6.8 percent this year and return to 3.1 percent in 2021.

Muhammad

About the author: Muhammad

Wayne Ma is a reporter who covers everything from oil trading to China's biggest conglomerates and technology companies. Originally from Chicago, he is a graduate of New York University's business and economic reporting program.

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