#Saudi GDP set to rise 2.1% in 2021; second COVID-19 wave could derail economy | ZAWYA MENA Edition

Saudi GDP set to rise 2.1% in 2021; second COVID-19 wave could derail economy | ZAWYA MENA Edition

Saudi Arabian investment bank, Jadwa Investment, expect a broad-based recovery for the kingdom in 2021 with both oil and non-oil sectors contributing to the rebound.

“Our forecast assumes between 15-20 percent of the adult population being vaccinated against COVID-19 by mid-year, and 70 percent by year end. As such, we see a quarter-on-quarter improvement in the Saudi non-oil economy, with this recovery being more vigorous in the second half of 2021, Jadwa said in a new report.

Jadwa, however, cautioned that the range of potential effects of COVID-19 on the economy remained uncertain. The main risk in the outlook comes from a more prolonged and serious outbreak of a second wave of COVID-19, possibly through a variant of the disease, or due to a slower rollout of the vaccine than currently anticipated, it noted.

“In this context, the recovery in the Saudi economy during the year will not be smooth, with the recent suspension of recreational activities illustrating this point. As such, all economic risks in the year ahead are wholly skewed to the downside.”

Provisional full year GDP data for 2020 showed that the economy contracted by 4.1 percent.