Saudi Arabia's economy shrank by 7% in Q2 showing depth of coronavirus hit

Saudi Arabia's economy shrank by seven per cent in the second quarter, a sign of how deeply the new coronavirus hit both the oil and non-oil sectors, official data showed on Wednesday.

The world’s largest oil exporter is facing its worst-ever economic decline after the Covid-19 pandemic curbed global crude demand and measures to contain the coronavirus hurt domestic demand.

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"The private sector and the government sector recorded a negative growth rate of 10.1 per cent and 3.5 per cent, respectively," said the General Authority for Statistics.

In the first quarter, Saudi Arabia posted a one per cent economic contraction, as that only captured part of the oil price collapse and the pandemic impact, which escalated in March.

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The non-oil sector, which is the focus of Saudi reforms aimed at diversifying the economy away from crude revenues, was hit the hardest in the second quarter, shrinking by 8.2 per cent, while the oil sector declined by 5.3 per cent, the statistics authority said.