Saudi economy grows 1.15% in the first quarter on rising oil prices

The growth report comes as Crown Prince Mohammed bin Salman pushes a package of sweeping economic and social reforms in the kingdom. Above, the spectators in Jeddah prior to the 2018 FISE World Series tour last March. (AFP)
Updated 01 July 2018
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Saudi economy grows 1.15% in the first quarter on rising oil prices

  • Oil sector grows by 0.6 percent in the first quarter of 2018
  • Non-oil sector - the focus of economic reforms - grows by 1.6 percent

DUBAI: The Saudi Arabian economy bounced back into growth mode in the first quarter of this year, according to National Accounts figures from the General Authority for Statistics.

Gross domestic product (GDP) saw a 1.2 percent rise in the three months to the end of March, compared with the same period last year. This improvement follows four consecutive quarters of falling GDP, or recession, the Authority said.

“This indicates a recovery in the Saudi economy following the slowdown in 2017. Moreover, it is evidence of the resilience of the Saudi economy and its ability to recover from both the reduction in oil prices and the structural reforms,” it added.

The recovery came as a result of the accelerated growth both in the oil and non-oil sectors. The oil sector grew by 0.6 percent in the first quarter of 2018, as global oil prices continued to recover from the declines that began four years ago. The comparable figure in 2017 was a decline of 4.3 percent in oil GDP.

The non-oil sector, which has been the focus of policymaker’s initiatives at stimulus and expansionary budgeting, grew by 1.6 percent in the first quarter of 2018 compared to 1.3 percent in 2017.

“The main drivers behind the recovery was growth in the non-oil manufacturing and mining sectors by 4.6 percent and 6.3 percent, respectively. Moreover, pursuant to Vision 2030, these sectors are expected to lead the Kingdom’s future economic growth,” the Authority said.

Government services and financial services sectors also played a role in the non-oil sector growth. The government services sector grew by 3.4 percent, compared to 3.2 percent last year, while the financial services sector grew by 2.1 percent compared to 0.8 percent.

“The growth in both sectors is expected to continue rising due to listing the Saudi stock market in the MSCI as well as implementation of financial sector program initiatives,” the Authority added.

The Tadawul All Share Index ended the day 0.31 percent ahead at 8339.86 points, near its high for the year. Brent crude, the other crucial indicator for the Kingdom, is just short of $80 a barrel.

Activity in the construction sector continued to decline, but at a slower pace than last year — 2.4 percent compared to 3.5 percent, reflecting the completion of several major projects.

The retail and hospitality sectors contracted by 0.5 percent in the first quarter, compared to a growth by 1.4 percent in the final quarter in 2017. “This is expected behavior which came as a result of more rationalized spending for households due to implementation of value added tax,” the Authority said.

Monica Malik, chef economist at Abu Dhabi Commercial Bank, told Reuters: “To some degree we’re likely to return to Saudi Arabia’s old model of growth this year, with rising oil exports feeding through into the rest of the economy. Structural reforms to create other sources of growth may have an impact in coming years, but don’t look like they will be in time to have an effect this year.”


Amazon workers strike as ‘Prime’ shopping frenzy hits

Updated 16 July 2019
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Amazon workers strike as ‘Prime’ shopping frenzy hits

  • The protesters waves signs with messages along the lines of “We’re human, not robots”
  • The strike was part of an ongoing effort to pressure the company on issues including job safety, equal opportunity in the workplace, and concrete action on issues including climate change

SAN FRANCISCO: Amazon workers walked out of a main distribution center in Minnesota on Monday, protesting for improved working conditions during the e-commerce titan’s major “Prime” shopping event.
Amazon workers picketed outside the facility, briefly delaying a few trucks and waving signs with messages along the lines of “We’re human, not robots.”
“We know Prime Day is a big day for Amazon, so we hope this strike will help executives understand how serious we are about wanting real change that will uplift the workers in Amazon’s warehouses,” striker Safiyo Mohamed said in a release.
“We create a lot of wealth for Amazon, but they aren’t treating us with the respect and dignity that we deserve.”
Organizers did not disclose the number of strikers, who said employees picketed for about an hour in intense heat before cutting the protest short due to the onset of heavy rain.
The strike was part of an ongoing effort to pressure the company on issues including job safety, equal opportunity in the workplace, and concrete action on issues including climate change, according to community organization Awood Center.
US Democratic presidential contenders Kamila Harris and Bernie Sanders were among those who expressed support for the strikers on Twitter.
“I stand in solidarity with the courageous Amazon workers engaging in a work stoppage against unconscionable working conditions in their warehouses,” Sanders said in a tweet.
“It is not too much to ask that a company owned by the wealthiest person in the world treat its workers with dignity and respect.”
Amazon employees also went on strike at seven locations in Germany, demanding better wages as the US online retail giant launched its two-day global shopping discount extravaganza called Prime Day.
Amazon had said in advance that the strike would not affect deliveries to customers.
Amazon has consistently defended work conditions, contending it is a leader when it comes to paying workers at least $15 hourly and providing benefits.
The company last week announced plans to offer job training to around one-third of its US workforce to help them gain skills to adapt to new technologies.
Amazon has been hustling to offer one-day deliver on a wider array of products as a perk for paying $119 annually to be a member of its “Prime” service, which includes streaming films and television shows.
The work action came on the opening day of a major “Prime” shopping event started in 2015.
Now in 17 countries, the event will span Monday and Tuesday, highlighted by a pre-recorded Taylor Swift video concert and promotions across a range of products and services from the e-commerce leader.
Prime Day sales for Amazon are expected to hit $5 billion this year, up from $3.2 billion in 2018, which at the time represented its biggest ever global shopping event, JP Morgan analyst Doug Anmuth says in a research note.