RIYADH: Saudi Arabia’s real gross domestic product recorded a 1.2 percent year-on-year growth in the second quarter of 2023, thanks to a 6.1 percent surge in the non-oil sector, official data showed.
According to the latest report from the General Authority for Statistics, the Kingdom’s non-oil sector witnessed a 1.6 percent increase compared to the first three months of the year, reflecting the ongoing diversification efforts in the nation’s economy.
Strengthening the non-oil private sector is a key agenda of Saudi Arabia’s Vision 2030, as the Kingdom’s economy is steadily reducing its dependence on oil.
The report, however, added that Saudi Arabia’s seasonally adjusted real GDP fell by 0.2 percent year on year in the second quarter.
GASTAT further noted that the Kingdom’s oil activities decreased by 4.3 percent in the three months to the end of June, compared to the same period of the previous year, while it dipped by 1.5 percent from the first quarter of 2023.
The decline in Saudi Arabia’s oil activities is in line with the decision of the Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, to reduce the crude output to maintain market stability.
In April, OPEC+ decided to reduce global oil production, with Saudi Arabia voluntarily trimming output by 500,000 barrels per day.
Building on this commitment, Saudi Arabia implemented an additional 1 million bpd cut in June, a decision which was later extended until December 2023.
The GASTAT report added that most economic activities recorded positive growth rates on an annual basis in the second quarter of 2023, with transport, storage and communication activities recording the highest growth rates of 12.9 percent.
Wholesale and retail trade, restaurants and hotel activities also grew by 9.8 percent in the second quarter compared to the same period of 2022.
GASTAT added that government services activities recorded an annual growth rate of 2.3 percent in the second quarter.
On Sept. 7 the International Monetary Fund noted that Saudi Arabia’s fiscal prospects are strong in the near term, with risks largely balanced.
In a press statement, the IMF said Saudi Arabia was the fastest-growing economy among G20 countries, achieving an overall growth rate of 8.7 percent.
The financial agency added that the Kingdom has sufficient precautionary reserves and the peg of the exchange rate to the US dollar is serving the Kingdom’s economy well.
