Saudi Arabia’s economy grew by 2.2% in 2018, driven by the oil sector, compared to a decline of 0.7% in 2017, the Saudi Arabian Monetary Authority (SAMA) said in a report.

The main risk for the Saudi economy comes from its exposure to the global oil market.

The oil sector accounts for some 45% of Saudi GDP and more than 63% of government revenue. “There have been recent signs of slowing global growth, which could indirectly impact the Saudi economy,” the report warned.

“Continued structural reforms will likely place some pressure on economic growth in the short-term,” it added, without giving a forecast for 2019.

In April the International Monetary Fund (IMF) estimated that Saudi economic growth in 2019 may be slightly higher than its earlier 1.8% forecast due to the faster expansion of the non-oil sector compared to the wider economy

The Saudi central bank governor told Reuters in April that Saudi economic growth in 2019 would be “no less than 2%”.

For the non-oil sector, growth is expected to be stimulated by expansionary fiscal policy as the budget for 2019 shows a significant increase in capital expenditure by 245 billion Saudi riyals (US$65.3 billion), the report said.

Saudi Arabia’s s non-oil sector saw modest growth of 1.7% in 2018 versus 1% in the previous year, SAMA said.

The country’s estimated budget deficit was 136 billion Saudi riyals or 4.6% of GDP in 2018 compared to the 9.3% deficit in the previous year.

Government revenues grew to 895 billion riyals in 2018, up 30% over the previous year, it added.

Non-oil revenues totalled 287 billion riyals, a rise of 90% on the previous year, with more than half coming from tax revenues, while government expenditure rose by 11% to 1 trillion riyals in 2018.