Saudi Ministry of Economy: GDP will decline by 4.3% in Q4, 2023 due to oil activity decline

The quarterly economic report of the Ministry of Economy and Planning revealed that the real gross domestic product recorded a decrease of 4.3% in the fourth quarter of 2023 on an annual basis, due to a decrease in oil activities by 16.2% compared to the same quarter of the previous year, in light of the continued voluntary reduction in oil production by 1.5 million barrels per day. Non-oil activities also grew at a rate of 4.2% on an annual basis, and government activities grew at a rate of 3.1%.

According to the type of economic activity, “mining and quarrying” recorded the highest rate of contribution at 24.1% of the gross domestic product, despite its growth declining by 16% during the fourth quarter of 2023 on an annual basis, reaching a value of 214.7 billion riyals.

“Government services” recorded the second largest contribution with 19.5% of the GDP and an annual growth of 3.1% during the fourth quarter, and its value amounted to 174.0 billion riyals, while the third largest activity, “financial services, insurance, real estate and business services” recorded a contribution amounting to 13.3% of the GDP. , with a growth of 6% during the fourth quarter on an annual basis, reaching a value of 118.9 billion riyals, according to the General Authority for Statistics.

Despite the decline in GDP by 0.8% in 2023 on an annual basis as a result of a decline in oil activities by about 9% on an annual basis, the good performance of non-oil activities continued, as they grew at a rate of 4.4% as a result of the strong performance of the non-oil private sector, as the Purchasing Managers’ Index remained at Expansion area during the year. The non-oil sector showed its resilience in facing global challenges with the growth of collective and social services, transportation, storage and communications, wholesale and retail trade, restaurants and hotels, the recovery of the tourism sector, and the continued strong performance of the construction sector, benefiting from government spending on major projects.