Saudi oil sector expands 5.1%

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TEAM EFFORT: Increasing supplies of natural gas is essential for the Kingdom’s economic growth.
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Updated 04 July 2016
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Saudi oil sector expands 5.1%

JEDDAH: Saudi Arabia’s economy expanded at its slowest rate in three years during the first quarter of 2016, official data showed.

Some analysts said the data pointed to a risk of growth in Saudi Arabia slowing to near zero this year, which would be its worst performance since the global financial crisis of 2009.
Gross domestic product, adjusted for inflation, grew 1.5 percent from a year earlier between January and March, down from a revised growth rate of 1.8 percent in the fourth quarter of 2015, the state statistics office said. It was the slowest growth since 0.3 percent in the first quarter of 2013.
The oil sector expanded 5.1 percent in the first quarter of this year as Saudi Arabia increased its production of crude and exported more refined products.
But the non-oil sector shrank 0.7 percent, its worst performance in at least five years.
“The important thing to remember is that austerity will be a multi-year process. There will be more measures in the next few years and these will continue to keep growth subdued,” said Monica Malik, chief economist at Abu Dhabi Commercial Bank.
Within the non-oil part of the economy, the private sector grew just 0.2 percent in the first quarter while the government sector shrank 2.6 percent, the official data showed.
The weakness of the non-oil sector was partly due to the fact that the first quarter of 2015 was unusually strong; in January that year, authorities awarded public employees two months’ extra salary to mark his accession to the throne.
But the fourth-quarter 2015 growth rate of 1.8 percent was revised down sharply from an original estimate of 3.6 percent. That points to the possibility of a similar revision for the first-quarter figures.
Malik said ADCB was cutting its Saudi GDP growth forecast for the whole of this year to a drop of 0.1 percent, from a previous prediction of 0.5 percent growth.
She noted that while private sector and non-oil activity could pick up slightly from the second quarter of this year, partly because there were signs that the government was paying some of its outstanding bills to private firms, oil output was not continuing to rise significantly year-on-year.
If the economy slows excessively, the government still has the option of spending more to stimulate growth; the central bank holds $573 billion of net foreign assets, and Riyadh has begun borrowing abroad this year to finance some expenditure.
But if it eases up on its austerity program too much it may increase pressure on the Saudi riyal’s peg against the US dollar, fueling concern among some foreign investors about the long-term sustainability of its economy.
In a report released late last month, London-based Capital Economics said it was expecting growth of between zero and 0.5 percent this year.
“Further ahead, as the fiscal squeeze continues, we think the economy is likely to remain weak for the foreseeable future.”


Samsung delays Galaxy Fold media events in China

Updated 22 April 2019
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Samsung delays Galaxy Fold media events in China

  • Instead of plaudits ahead of the phone’s launch on April 26 in the US, Samsung has instead received brickbats
  • The hashtag #foldgate trended on Twitter because of the smartphone issues

SEOUL: Smartphone maker Samsung postponed media events for its Galaxy Fold planned for this week in Hong Kong and Shanghai, a company official said, days after reviewers of the foldable handset reported defective samples.
The official did not elaborate on reasons or rescheduling.
Instead of plaudits ahead of the phone’s launch on April 26 in the United States, the South Korean conglomerate has been blighted by technology journalists reporting breaks, bulges and blinking screens after using their samples for as little as a day.
Samsung said it received “a few” reports of damage to the displays of samples of the $1,980 handset, raising the specter of the combustible Galaxy Note 7 three years ago which the firm ultimately pulled from shelves at massive cost.
The reviewers’ reports of broken screens went viral online and prompted the creation of hashtag #foldgate on Twitter.
Samsung has hailed the folding design as the future in a field that has seen few surprises since Apple’s iPhone in 2007. Chinese rival Huawei Technologies has also announced a folding handset, the Mate X.
The Samsung official on Monday said it had no change to its previously announced release date in the United States.
It plans to begin South Korean and European sales in May, and Chinese sales from an undisclosed date.