Saudi Arabia's economy shrank 3.7 percent in the fourth quarter of 2023 compared to a year earlier, due to a decline in oil revenues, the state statistics agency said on Wednesday.
The decline in real gross domestic product was “due to the decline in oil activities by 16.4 percent, while non-oil activities and government activities increased by 4.3 percent and 3.1 percent, respectively, on an annual basis,” the General Statistics Authority said government, citing preliminary estimates.
The…
Saudi Arabia's economy shrank 3.7 percent in the fourth quarter of 2023 compared to a year earlier, due to a decline in oil revenues, the state statistics agency said on Wednesday.
The decline in real gross domestic product was “due to the decline in oil activities by 16.4 percent, while non-oil activities and government activities increased by 4.3 percent and 3.1 percent, respectively, on an annual basis,” the General Statistics Authority said government, citing preliminary estimates.
The world's largest crude oil exporter is trying to shift its economy away from fossil fuels and position Saudi Arabia as a tourism, business and sports hub as part of Crown Prince Mohammed bin Salman's Vision 2030 reform agenda.
Oil company Saudi Aramco – which is 90 percent owned by the government – reported record profits in 2022 after oil prices skyrocketed due to Russia's invasion of Ukraine.
But prices were lower last year and, after a series of supply cuts since October 2022, the Gulf kingdom's daily production stands at about nine million barrels a day, well below its 12 million bpd capacity.
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On Tuesday, Aramco said it would abandon a plan to increase its production capacity to 13 million bpd by 2027 under orders from the Energy Department, a decision that analysts said could reflect uncertainty about market demand in the coming years.
In 2023 as a whole, real or price-adjusted GDP fell by 0.9 percent compared to 2022, the statistics authority announced on Wednesday.
The Finance Ministry announced in December that it expected real GDP growth of just 0.03 percent in 2023 and 4.4 percent this year.
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The ministry also said it forecast a budget deficit of 2.0 percent of GDP in 2023 and 1.9 percent of GDP this year, reflecting rising spending and lower oil revenues.
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