Saudi Arabia’s economic outlook is expected to improve further in 2019, although downside risks remain as a result of the global economic slowdown and the impact it could have on oil markets. 

The kingdom’s central bank said: the country’s economic growth recovered to 2.2% in 2018 after contracting the previous year, the Saudi Arabian Monetary Authority said in a June 1 report. The rebound was mainly powered by the oil sector, which grew 2.9% while the non-oil sector expanded 1.7% in 2018, compared to 1% the previous year, SAMA said.

The gains are welcome news for the OPEC powerhouse, which had been hit earlier by a slide in global oil prices just as the government was pushing to decrease reliance on crude and boost foreign direct investment. The kingdom is also working to bring more Saudis into the workforce instead of relying on expatriate labor.

The SAMA report also spotlighted:

– Inflation accelerated to 2.5% in 2018, mainly due to new measures such as value-added tax and energy price reform

-The budget deficit decreased to 4.6% of gross domestic product compared to 9.3% in 2017

– Government revenue increased by 30%; spending rose by 11% to around 1 trillion Saudi riyals ($266.7 billion)

– Current-account data suggest a surplus of 271 billion riyals, or 2.7% of GDP, versus 39 billion riyals in 2017; improvement mainly due to higher oil prices and increased production