Saudi Arabia: Saudi Arabia’s economy will expand faster than previously forecast this year as non-oil industries continue their recovery from the pandemic, according to Jadwa Investment.

GDP will grow by 1.8 percent in 2021, a revision from a previous estimate of 1.3 percent, Jadwa said in a research report on Wednesday. Non-oil growth will come in at 3.5 percent, driven by the non-oil private sector, which Jadwa sees rising 4.4 percent, compared to a previous estimate of 3.1 percent.

“Whilst the rebound is no surprise, some sectors have performed better than anticipated,” it said. The investment bank attributed the improvement in the non-oil sector to activities in real estate, manufacturing, wholesale and retail, and restaurants and hotels.

Despite the overall growth in GDP, Jadwa expects oil sector GDP “being marginally down year-on-year, at -0.7 percent,” unchanged from its previous outlook.

Oil prices are expected to increase this year with Brent averaging $67 per barrel, leading to higher government oil revenue of SR568 billion in 2021, revised from SR528 billion previously, it said.

“With no changes to government expenditure, we see the fiscal deficit totalling -SR67 billion (-2.1 percent of GDP), 53 percent lower than budgeted by the Ministry of Finance,” it said.