Instructions: Please read the instructions very carefully because your grade will depend on following the instructions. (3 points)
- You have to post your discussion on the blackboard, ATTACHEMENT WILL NOT BE ACCEPTED.
- Since this discussion worth 3 points, you should put more effort on it.
- You could reply to as many posts as you would like (there is no limit as long as the discussion still within the deadline) because your grade will depend on both: your post and replies. THE MINIMUM REPLIES ARE 5.
- Your five replies have to add to the discussion rather than evaluating the discussion; so replies such as “I agree with you”, “great post”, “great point” ……. Etc. WILL NOT BE ACCEPTED.
- Relate your answer to the attached excel file that consists of 9 GDP & GDP related tables from the General Authority of Statistics and what you have learned so far.
- You can add to your discussion from online resources, BUT YOU HAVE TO CITE YOUR WORK.
- DEADLINE: JULY 13, 2021
After finishing the first half of the semester, you should be able relate what you have learned so far into the macroeconomic data. So, read the following statements and explain that using what you have learned such as productivity & production and GDP growth & GDP components. Then, relate that to the attached tables:
- What happened to the GDP in general and the GDP by economic activity on table 1 or table 4 (table 4 is easier) during the pandemic? Which sector has been affected more during the pandemic and why would you think this sector has been affected more?
- One of the most important targets for the Vision 2030 is to switch the production in Saudi Arabia from mostly depending on Oil to diversify its production, would you think we are going into the target of diversifying production through looking at the tables 15 & 16 (table 16 is easier to see because it shows the growth) from 2018 to 2021. You can also look at tables 8 and 10 for annual data.
Remember that what you have learned about the national income (GDP) Y = C + I + G + NX is exactly the same components on table 17 or 18 and some other tables.
first
- in general look at table 4 the GDP growth at Saudi Arabia economy at corona crisis time. if we compered the first Quarter of 2020 with the fourth quarter at the same year, we can see the GDP growth shrank from -3.2 to -9.4. Also, we can see the different between GDP before crises and after fell by -11.7 at GDP growth in 2020 in the Covid-19 crises compared in GDP growth at 2019 before the pandemic which was 0. 8. Now if we look at the table, we will see that some sectors are not affected such as Agriculture, frosty and fishing sector it has growth from 0.7 in the first Quarter of 2020 compered to 6.2 at the first quarter of 2021. And if we compered before the pandemic at 2019 by 1.2 with growth in 2020 by 1.3.in fact this sector ha seen increase in growth because the pandemic reduce the process of importing the food because of the global food crisis on corona time this reflect positive on local food project there was an expended and production increased in planet, animal and marine food because the increase in demand other things that government is interest in providing high quality national agriculture products and divers self- sufficiency and reduce depend on import. Also, the bank service charge one of the sectors that not effected the GDP growth In2019 was 4.9 and increase in 2020 to become 7.9 this back to the government efforts to prevent one of the negative effects of corona and strict policies from the monetary institutions and its successful management and support for the privet sector. Back to the table four we can see the manufacturing sector is the most sector that had been fell from -6.5 in 2019 before the pandemic to -36.4 in 2020. Due to full and partial ban on the economy precautionary measures to confront corona virus.
- Back to table 16 we can see the GDP growth on oil sector decrease by the years. Start from the first quarter in 2018 it was 2.6. to the first quarter in 2019 -3.2 to reach first quarter in 2021 by -8.7. and looking to the non- oil sector we can notice growth in the third quarter of 2020 GDP growth of 5.7. this means Saudi Arabia is going in to the target of the vision 2030 to diversity production and minimize depending on the oil even it still high depending.
- Reference
https://www.stats.gov.sa/ar/823
2nd
Looking at Table 4, we note that economic activities such as mining and quarries were affected by the epidemic, and a significant loss occurred by 35.7%. The gross domestic product was also affected by the epidemic, and it shrank by 11.7%.
Looking at Table 4, we note that economic activities such as mining and quarries were affected by the epidemic, and a significant loss occurred by 35.7%. The gross domestic product was also affected by the epidemic, and it shrank by 11.7%. As we note in Table 16 the growth of the non-oil sector from 2018 to 2021, as well as a contraction in the oil sector in 2019, this indicates that the government is seeking to get rid of dependence on the oil sector and go to the non-oil sector. We conclude that the government will achieve its goals in 2030 and there will be diversification in production.
It became clear to us in Table (4): a decrease in the GDP growth rate for the year (2020) compared to (2018) and (2019) in all sectors. As it became clear to us from Table (4): The sectors that have been greatly affected by the epidemic are the mining and quarrying sector and the oil sector. It is clear from Table (4) that the annual growth rate of the gross domestic product of crude oil is 36.4%. The oil sector has been affected by the epidemic, which led to a decline in the oil sector by 29.9% from 2019 to 2029. The reasons that led to the decline of the oil sector are the closure due to the spread of the epidemic, which led to a decrease in demand for crude oil and its derivatives such as petroleum, as well as preventing the movement of vehicles and others, and the closure of many industrial sectors caused a decrease in prices and this led to a decrease in the total revenues generated by the sectors.
The spread of the epidemic reduced the demand for oil, which led to a significant drop in prices and caused a rise in oil inventors. Mandatory closures and social distancing between consumers and producers also had a significant impact on commercial activities. The epidemic constituted an economic obstacle, causing disruption to the wheel of economic growth. And many sectors were subject to closure by virtue of the state of emergency and prevented movement and travel, and this led to the weakening of purchasing power.
It is clear to us in Table 16: We notice in the table the growth of the non-oil sectors or the private sectors, as it becomes clear to us that dependence on the non-oil sectors in the year 2030. As it became clear to us in Table 15 from 2021 to 2019 Q1 = 398,505 and Q4 = 385,794 a decrease in the growth rate of GDP in the oil sector by = 12,711 (398,505-385,794 = 12,711 million SAR).
As is evident to us in the year 2020 the growth of the non-oil sectors, it is clear to us that the non-oil sector increased in 2019 by 0.9% to 4.9%. We have noticed that the GDP growth rate has increased from 09% to 49% in the non-oil sectors from 2019 to 2020, as indicated by the growth of the non-oil sectors in the annual GDP amounting to 12.711 million SAR.
We notice a growth in the private sectors and a decrease in the rate of GDP growth in the oil sector.
We note in Table 16 that the oil sector has swarmed in 2019. This indicates that the government is seeking to get rid of dependence on this sector and go to non-oil sectors.
We conclude that the government will achieve its goals in 2030, and there will be diversification in production. We conclude that in 2030, dependence on oil will decrease, and it will depend on non-oil sectors such as private sectors. The dependence on oil is decreasing and the dependence on the non-oil sectors increases.
References:
Walid. D. (2020). The Great Oil Shock and Corona. Cairo.
Tareq. B. (2020). The spread of Corona is destroying energy markets. Cairo.
Mankiw, N. Gregory.D. (2020). Principles of Macroeconomics. Oman.
3rd
The epidemic of COVID-19 has impacted GDP.
Table 4 shows the result in 2019 the Saudi economy declined, with GDP growth of 0.8%, before the breakout pandemic.
When the virus broke out during in the first quarter of 2020, GDP growth decreased.
At the end of 2020, the GDP growth rate fell severely by -11.7%.
The most affected sector during the COVID-19 pandemic is the creole petroleum and natural gas sector. It has decreased by 36.4% by the end of the year 2020. It occurred because most countries have implemented curfews. Transportation is becoming out of fear of spreading infection. As a result, the consumption and dependence on oil and gas have reduced. Therefore, the demand for them has decreased dramatically in many countries.
The least affected sector during the COVID-19 pandemic is the agriculture, fishing, and forestry sector. Many data indicate that the COVID-19 pandemic represents a real opportunity to revive local agriculture more instead of relying on imported products produced on farms and industrial chemicals that harmful to health.
According to table 16, we see in the third quarter of 2020, the oil sector was declining and fell by -2.9% until it reached -8.7% in the first quarter of 2021. While the growth rate in the non-oil sector increased by 5.7% in the third quarter of 2020. That means the Saudi government has put out a significant effort to economic diversification to reduce reliance on the petroleum sector as the primary source of revenue.
Refrences:
4th
The epidemic of COVID-19 has impacted GDP.
Table 4 shows the result in 2019 the Saudi economy declined, with GDP growth of 0.8%, before the breakout pandemic.
When the virus broke out during in the first quarter of 2020, GDP growth decreased.
At the end of 2020, the GDP growth rate fell severely by -11.7%.
The most affected sector during the COVID-19 pandemic is the creole petroleum and natural gas sector. It has decreased by 36.4% by the end of the year 2020. It occurred because most countries have implemented curfews. Transportation is becoming out of fear of spreading infection. As a result, the consumption and dependence on oil and gas have reduced. Therefore, the demand for them has decreased dramatically in many countries.
The least affected sector during the COVID-19 pandemic is the agriculture, fishing, and forestry sector. Many data indicate that the COVID-19 pandemic represents a real opportunity to revive local agriculture more instead of relying on imported products produced on farms and industrial chemicals that harmful to health.
According to table 16, we see in the third quarter of 2020, the oil sector was declining and fell by -2.9% until it reached -8.7% in the first quarter of 2021. While the growth rate in the non-oil sector increased by 5.7% in the third quarter of 2020. That means the Saudi government has put out a significant effort to economic diversification to reduce reliance on the petroleum sector as the primary source of revenue.
5th
1.What happened to the GDP in general and the GDP by economic activity on table 1 or table 4 (table 4 is easier) during the pandemic? Which sector has been affected more during the pandemic and why would you think this sector has been affected more?
As shown in Table 4, the country experienced -11.7% growth due to global recessions aggravating the service sector. A decline in oil prices and pandemic restrictions; conclusively reduced human capital for all sectors. Heavily serviced-based sectors such as transportation, hotels, and entities alike experienced a massive decline as most of these are unfeasible for alternative remote setup; hence a decline in productivity subsequently results in low production and income, limiting consumption. A similar notion applies to the mining and manufacturing sector, for despite technological advancements, labor is still necessary to oversee oil production. However, excessive supplies due to decreasing demand for Oil resulted in price cuts significantly, factoring into the further drop of its world price, consecutively decreasing its production and income value. At the same time, finance and agriculture sectors thrived in the pandemic as the aggregate demands for such leveled due to the essentiality of food reserve despite constraints and assisting monetary transactions. Thus far, labor inputs are paramount to productivity, for this is congruent to outputs of goods and services, upon which the kingdom of Saudi Arabia could potentially increase government revenues.
More importantly, the service sector bears most of the global pandemic impact, for it resulted in temporary or permanent labor dislocations from numerous businesses that shut down; along with this, unemployment and further inflation burden both households, firms, and the government. Therefore, the virus transmission significantly reduces labor powerhouses that fuel productivity, decreasing income, and limit the expenditure capacity of members of the economy.
2. One of the most important targets for the Vision 2030 is to switch the production in Saudi Arabia from mostly depending on Oil to diversify its production, would you think we are going into the target of diversifying production through looking at the tables 15 & 16 (table 16 is easier to see because it shows the growth) from 2018 to 2021. You can also look at tables 8 and 10 for annual data.
Tables 8 and 16 show that GDP rates for the non-oil sector are higher than the oil sector, suggesting that a moderate diversification of capital is less dependent on nonrenewable reserves. Competitive increases in non-oil production from 2018 to 2020 against the gradually decreasing outputs of the oil sector indicate consistent deviation efforts towards private and government sectors for the succeeding years. Interventions of the Vision 2030, such as the fiscal balance and Saudi Aramco strategic transformation program, focus on stimulating the increase of non-oil revenues through advancement programs for human capital, creation of sovereign wealth fund, and exploration of industries to add valuable private sectors. (Saudi Vision 2030 Document, 2021) Such programs would channel investments from the oil sector to other markets and further improve productivity and preserve resources, therefore, sustaining ideal growth for the short and long term. Other than this, regulation concerning oil production pre-determines controlled output from here on. (OPEC, 2021). Hence, the constant growth of the non-oil sectors attributed to the launched programs of the kingdom confirms that the country is in the process of achieving its diversified production.
References
- Opec.org. 2021. OPEC: The 10th (Extraordinary) OPEC and non-OPEC Ministerial Meeting concludes. [online] Available at: https://www.opec.org/opec_web/en/press_room/5891.htm [Accessed July 2021].
- 2021. Saudi Vision 2030 Document. [ebook] Vision 2030. Available at: https://www.vision2030.gov.sa/v2030/overview/ [Accessed July 2021].
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