RIYADH (Reuters) – Saudi Arabia’s real gross domestic product (GDP) decreased 1.8% year-on-year in the first quarter, flash estimates by the government’s statistical authority showed on Wednesday, as a decline in oil activities continued to hurt overall growth.
The kingdom’s GDP had shrunk 3.7% in the fourth quarter of 2023, as cuts to oil production and lower crude prices weighed on the economy.
Saudi Arabia, the world’s largest oil exporter, is pumping around 9 million barrels per day (bpd), well below its around 12 million bpd capacity after it cut production as part of an agreement with OPEC and other oil producers.
Oil activities were down 10.6% in the first quarter compared with the previous year, estimates from the General Authority for Statistics showed, while non-oil GDP grew 2.8% year on year and government activities increased 2%.
On a quarterly basis, seasonally adjusted growth was up 1.3% from the previous quarter, driven by a 2.4% increase in oil activities and a 0.5% growth in non-oil activities, although government activities decreased by 1%.
The kingdom’s economy contracted 0.9% in 2023, the data showed, pulled lower by the oil sector, while non-oil activities grew by 4.6% last year.
This marks sharp contrast to 2022, when Saudi Arabia was the G20 group’s best performing economy, boosted by an oil price windfall, which allowed it to achieve growth of 8.7% and its first fiscal surplus in almost a decade.
Saudi Arabia needs hundreds of billions to achieve the objectives of its plan to diversify the economy away from oil known as Vision 2030.
(Reporting by Pesha Magid; Editing by Tomasz Janowski)
Comments