Saudi Arabia’s real gross domestic product (GDP) shrank an estimated 3.7% year on year in the fourth quarter of 2023, according to data published by the government’s statistics agency.
For the full year, Saudi Arabia’s economy shrank 0.9%, the data showed.
The economic drop was attributed to a 16.4% decline in oil activities, following the decision by OPEC+ (the Organization of the Petroleum Exporting Countries and its allies) to implement voluntary production cuts in a bit to balance out global production and adapt to falling oil demand.
Nonetheless, the data showed that the drop was smaller than the 4.4% year-on-year slide in the third quarter of 2023, its first quarter of year-on-year contraction since the COVID-19 pandemic.
In contrast, the Kingdom reported that non-oil activities and government activities expanded by 4.3% and 3.1%, respectively, year-on-year, as a result of the country’s efforts to implement Vision 2030 and transition its economy away from fossil fuels.
Earlier this week, Saudi Aramco announced it will no longer aim to increase its maximum sustainable capacity (MSC) to 13 million barrels per day (bpd), after receiving a directive from the Kingdom’s Energy Ministry.
Currently, Saudi Arabia’s oil sector accounts for 42% of the country’s GDP.
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