ALBAWABA – Economic growth in Saudi Arabia slowed in the second quarter of 2023 on more oil output cuts and fluctuating oil prices, according to preliminary data from the General Authority for Statistics, released Monday.
Gross Domestic Product (GDP) or economic growth in Saudi Arabia slowed to 1.1 percent on annual basis, in the second quarter.
The decline in the rate of economic growth in Saudi Arabia turned the Kingdom from one of the fastest-growing countries in the Group of 20 to one of the slowest, according to Bloomberg.
Economic growth in Saudi Arabia hit 3.8 percent, on an annual basis, in the first quarter of 2023, and 11 percent in the fourth quarter of 2022.
Oil-cuts undermine economic growth in Saudi Arabia
The non-oil sector, where most Saudis are employed and which the government wants to develop to diversify the economy, expanded 5.5 percent, on an annual basis. Meanwhile, oil GDP dropped 4.2 percent.
Earlier in July, the kingdom got the largest downgrade among major economies by the International Monetary Fund (IMF), Bloomberg reported.
The fund cut the kingdom’s growth outlook for 2023 to 1.9 percent, a downward revision of 1.2 percentage points from the IMF’s earlier estimates.
Economic growth in Saudi Arabia reached nearly 9 percent last year, the fastest in the G-20, driven by record crude output of around 10.5 million barrels a day. With oil prices averaging about $100 a barrel, Russia’s invasion of Ukraine disrupted energy markets.
This year, steep cuts in production intended to shore up crude prices have pushed Saudi oil output to the lowest in years. Brent is trading around $84.60 a barrel, down 1.6 percent since the end of 2022, though still close to a three-month high.
The $1 trillion economy’s receipts from oil sales abroad declined by more than a third in May to the lowest since September 2021, as reported by Bloomberg.
