Saudi Electronic University Economic Effects of Covid19 Pandemic Questions

“The COVID-19 Pandemic has spread rapidly across countries in the world. It has disrupted the lives and livelihoods of all communities and is causing major challenges to vulnerable people. It also has a far reaching and negative impact on the economy and the well-being of the population”

1- what are the real economic effects of the COVID-19 pandemic on the Saudi Arabian economy?

2- Are the economic effects temporary or persistent?

3- Does it have economic costs (i.e. lose jobs), or do policies that slow the spread of the pandemic also reduce its economic severity?

First one

1. As we know, the economy is the basic system on which the country is based. The GDP is measure of a country’s income. During the pandemic, we notice that the economy as a whole has been affected and the GDP was reduced as all. From table 4 we can see the real affect in GDP in each quarter for several different sectors, for example in agriculture, forestry and fishing we can see the growth will affect in quarter2 by (-0.4) in year 2020 more than other quarters because the pandemic was in its strongest stage, and it recover in the first quarter in year 2021 by (6.2), but in fact, it was not affected as much as other sectors because fishing and agriculture are internal factors that are in demand at all times. On the other side, we can see a large affect in mining and quarrying sector in all quarters especial in quarter2 by (-59.6) which is a big different than last years and in the all year it fell by (-35.7) but it is recovery in first quarter in year 2021 by (-7.1) this happen because the global economy was negatively affected and thus their import of oil from our country was reduced. Also, due to the curfew, local gasoline consumption has decreased, as a summary of the entire economic growth in 2020, it was affected by a shortage of 11.7.

Second one

The Saudi Vision 2030 is a framework for reducing Saudi Arabia’s reliance on oil and diversifying the country’s economy. The framework’s objectives include increasing non-oil trade, promoting a more secular image of the Kingdom, and increasing military spending.

The objectives are expected to generate new revenue streams for the government, such as taxes, fees, and income for the sovereign wealth fund. Another major component of the Kingdom of Saudi Arabia’s Vision 2030 is to increase private sector participation and create more job opportunities.
Non-oil sector growth from 2018 to 2021. Saudi Arabia will be able to meet its targets by 2030 if current trends continue. Table 16 demonstrates that the oil sector has been contracting since the first quarter of 2019, indicating that Saudi Arabia is gradually weaning itself from its reliance on it.

Table 16 so, with the exception of two quarters, indicates the non-oil sector‘s growth to be stable. When compared to the oil industry, the non-oil sector’s growth is more stable, which is in line with Saudi Arabia’s goal of diversifying production by 2030.

Only the fourth quarter of 2020 had positive growth of nearly, 2.6 percent, but the first quarter saw negative growth of 8.7 percent. Nonetheless, the non-oil sector, both private and public, grew at a good rate in the third quarter of 2020 and 2021. As a result, it can be seen that the Kingdom is progressing toward its 2030 objective of shifting away from reliance on oil and toward other products. This goal will help to keep the Kingdom’s economy healthy and stable it.