Saudi Private Sector Support Package Lessens COVID-19 Effects on GDP
A support package provided by the Saudi government to the private sector since the beginning of the outbreak of the coronavirus would contribute to limiting the decline in the GDP by an average of 2.5 percent, according to a study by a Saudi international research center.
The study noted that the financial support measures implemented by the Kingdom to compensate for the economic repercussions of the pandemic in the short term, would reduce the expected decline of the GDP by 2.4 to 2.6 percent.
It noted that the transport, retail and entertainment sectors were the most affected.
The study, titled “Estimating the Impact of the COVID-19 Pandemic on the Saudi GDP, was released by the King Abdullah Petroleum Studies and Research Center (KAPSARC). It revealed that recreational, cultural and sports activities, land and air transport, in addition to retail trade, had topped the list of sectors that were most affected by the pandemic.
This comes at a time when the International Monetary Fund (IMF) expected that Saudi Arabia’s GDP would shrink by 6.8 percent this year.
The new projection for the Saudi economy, the largest in the region, is 4.5 percentage points lower than what the IMF had projected just two months ago.
The IMF, however, raised its estimates for the growth of the Saudi economy during 2021 to 3.1 percent compared to its previous expectations of 2.9 percent, according to the World Economic Outlook report issued this month.