The Effects of the COVID-19 Crisis on the Main Saudi Non-Petroleum Sectors

This study investigates the economic impact of the COVID-19 in Saudi Arabia by examining the decrease of non-petroleum sectors՚ GDP, and total GDP.  These sectors had been in hibernation for more than four months. They have been directly affected, in particular tourism and transport. . Manufacturing and trade also have suffered during the lockdown. We use a two steps method with a simultaneous equation system for sectorial GDP growth and a linear model to estimate the negative effects of the COVID19 pandemic on Saudi GDP growth. rate.  Our estimation are made for two scenarios: the first normal evolution of the crisis in a short period and the second a new wave with more long duration of the pandemic. Our results show that the most affected sector is of the pandemic. Our results show that the most affected sector is Services (from -6.7% to - 8.4%) followed by Whole and Retail Sales (-2 % to - 3.1%). The agriculture and manufacturing sectors are the less affected, respectively (-1.1% to -1.8%) and (-1.7% to -2.5%). Financial sector՚ GDP expected variation is between -1.3% and -2 %. The total impact of the health crisis on the main non-petroleum sectors varies between 12.6% and 17.8%. So Saudi GDP may decrease by -19.6% to -24.8 %. Keywords: COVID-19, Economics effects, GDP, GDP growth, Saudi sectors. DOI: 10.7176/EJBM/13-18-07 Publication date: September 30 th 2021