Saudi Arabia’s GDP continued to contract in the second quarter of this year, recording a slight decline for the fourth consecutive quarter as OPEC+ production cuts continued.
The Kingdom’s economic output contracted by 0.4% year-on-year during the period from April to June 2024, according to preliminary data released by the General Authority for Statistics on Wednesday, driven primarily by an 8.5% contraction in the oil sector.
Better result
But the second-quarter result was better than the 1.7% contraction recorded in the first quarter, as non-oil activity grew by 4.4%, up from 3.4% previously.
Saudi Arabia has focused during the past period on expanding the non-oil economy, which generates job opportunities for most of the population.
“We expect this to be the last quarter of deep negative hydrocarbon growth,” Standard Chartered economist Carla Slim said before the data was released, as the effects begin to dissipate, Bloomberg reported.
“Statistics”: Non-oil activities grew by 4.4% during the second quarter of 2024. https://t.co/y14plA7ETe#SPA_Economic pic.twitter.com/whTGyho877
— SPA Economic (@SPAeconomic) July 31, 2024
According to Ziad Daoud, chief emerging markets economist at Bloomberg Economics, Saudi Arabia’s non-oil sectors depend on oil prices. As oil prices rise, the authorities hire more employees, which raises the level of government services, which is a non-oil activity.
The International Monetary Fund lowered its estimate for Saudi GDP growth this year to 1.7% from 2.6% in April.
Source : Bloomberg + Saudi Press Agency (SPA)
