On March 16th the government published finalized full-year and fourth-quarter economic data, confirming that real GDP shrank by 4.1% in 2020 but picked up strongly towards the end of the period.

The sharp full-year recession was in line with our estimate and confirmed partial, provisional data released by the General Authority for Statistics (GAS, a government agency) last month—the inevitable result of swingeing oil production cuts, a corollary reduction in government spending, the enforced constraints on private-sector business activity imposed to contain the coronavirus (Covid‑19) pandemic and the international economic slump induced by the disease. Fourth-quarter GDP shrank by 3.9% year on year. Meanwhile, the easing of the OPEC-agreed output curbs from August and the progressive reopening of the domestic economy, coupled with an improvement in both local and international business confidence based on vaccine rollouts, drove acceleration of quarter-on-quarter growth in October-December, to 2.5% from 2% in the previous quarter—following a precipitous 5.9% second-quarter slump.