Riyadh, Saudi Arabia

It’s far from booming, but things are finally starting to look up for Saudi Arabia’s non-oil economy. Bank lending to private businesses grew last quarter at the fastest pace since 2016 and a gauge of economic activity rose the most in over a year. Consumer spending also improved, albeit slightly.

Early signs of a turnaround suggest that the rout which followed the 2014 oil crash has run its course as a gradual recovery takes hold, helped by an increase in public spending.

While Saudi Arabia is the world’s biggest oil exporter, it’s the non-hydrocarbon sector that acts as the main engine of job creation as Crown Prince Mohammed Bin Salman tries to overhaul the economy. And the fact that unemployment remains near a decade-high shows how difficult his challenge is.

“The data is starting to paint a slightly more positive picture,” said Khatija Haque, head of Middle East and North Africa Research at Emirates NBD, Dubai biggest bank.

She expects non-oil gross domestic product to expand 2.7 percent this year, the fastest pace in four years but still way below the average of 6.2 percent between 2000 and 2015.

The Emirates NBD Purchasing Managers’ Index, a measure of business activity in the non-oil private sector, saw the fastest expansion since the last three months of 2017.