General Domestic Product (GDP) – Second Quarter 2019

The Central Statistical Bureau published the GDP figures at fixed prices for the second quarter of 2019. The importance of reading these figures lies in two dimensions. The first one is to follow their development, i.e. their growth which means the expansion or contraction of the economy. The second is reading the development within the components of that output to see its strong or weak aspects. More important still is to follow the impact of public policies on reforming its structural imbalances.

These figures at fixed prices -real growth- estimate that positive growth of 0.4% was achieved between the second quarter of 2018 and the second quarter of 2019, while what was really achieved was negative growth of -1.3% between the first quarter and the second quarter of the current  year  due  to  the shrinking of non-oil sectors by -2.6%. The positive growth between the second quarter of 2018 and the second quarter of 2019 came mostly from the growth of non-oil sectors which expanded by 1.4%, while the overall growth rate decreased to 0.4% as we mentioned due to the negative contribution of the oil sector to that growth, which contracted by -0.4%.

What does not seem healthy is that the economic sustainability policies  – diversification of income sources- announced in all development plans and in all government statements have not been achieved at all. In fact the structural imbalance of production, indicated by the dominance of the oil sector over GDP components, continues as we have noted in its overwhelming impact in the newly published figures. The contribution of the oil sector in fixed prices is still more than half of the total GDP. It was about 54.1% in the second quarter of 2018 and became 53.7% in the second quarter of 2019; this means that the contribution of all other sectors in the second quarter of 2019 amounted to 46.3%, an unsustainable contribution but is heavily supported by the oil sector. The contribution of any of the other sectors has not exceeded 11%, which means that the country lacks a development identity. The closest to reaching 11% was the public administration, defense and social security sectors with 10.9% contribution; it has nothing to do with any developmental approach.