Saudi Arabia’s GDP rose 1.5% y/y in Q2 according to the flash estimate. This was mainly driven by a boost from non-oil activity, which increased 10.1% y/y (1.3% q/q growth), but the oil sector also strengthened due to higher oil prices and production.
The Saudi budget deficit narrowed to an estimated 0.6% of GDP in Q2 on the back of higher oil prices and a surge in tax revenues. According to the finance ministry, oil revenues rose 38% y/y, while non-oil revenues tripled to SAR116bn reflecting the effect of the tripling of VAT in July last year.
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