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Saudi Arabia booked an almost 10-percent expansion of its GDP over the first quarter of the year thanks to the sustained rally in oil prices, according to official data.
At 9.9 percent, the Kingdom’s economic growth during the quarter is the highest since the third quarter of 2011, Al Jazeera reported.
“This growth is due to the high increase in oil activities by 20.3 percent,” the Saudi statistics authority said.
Aramco reported a net profit of $39.5 billion for the first quarter, thanks to higher oil prices. This was an 82-percent annual improvement and a record quarterly profit for Aramco since it went public three years ago.
As a percentage of total GDP, oil and gas accounted for 32.4 percent and was the highest contributor to growth during the reporting period. Non-oil activities increased by an annual 3.7 percent in the first quarter.
“The underlying data still points to a healthy pace of expansion in the non-oil sector,” according to Monica Malik, chief economist of Abu Dhabi Commercial Bank, who spoke to Al Jazeera.
“Saudi is in a very strong position, given the limited global oil capacity and the high oil prices,” she added.
The strong performance of Saudi Arabia’s oil industry is set to continue as the world supply remains tight. The Kingdom recently raised its official selling prices for almost all buyers of its crude for July deliveries, with the increase most substantial for Asian buyers.
Meanwhile, however, Saudi Arabia also committed, alongside OPEC+, to boost monthly production by almost 650,000 bpd combined net month and in August, up from an originally agreed 432,000 bpd.
So far, this has failed to have any negative effect on oil prices because, besides Saudi Arabia and a couple of other Middle Eastern producers, OPEC members are finding it hard to pump as much as originally agreed.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.