Recent official statistics disclosed a sharp downturn in Saudi Arabia’s real gross domestic product (GDP), which fell by 4.3 percent in the final quarter. This drop was primarily due to oil activity plummeting by 16.2 percent from the previous year, significantly influenced by the country’s major crude production reductions.
An annual overview by the General Authority for Statistics highlighted a 0.8 percent contraction in the real GDP for 2023 with oil-related sectors experiencing a 9 percent setback. Conversely, the non-oil sectors demonstrated resilience with a 4.4 percent expansion.
Amidst global economic uncertainties, Saudi Arabia proactively chose to curtail oil output by 1 million barrels daily until the end of the year, aiming to balance the volatile market. This strategic move, however, has brought substantial challenges to the oil-driven economy.
Initial forecasts had anticipated a milder fourth-quarter contraction of 3.7 percent year-on-year. Nonetheless, the actual data revealed a more pronounced effect of oil production cuts on the nation’s overall economic health.
(Incorporating insights from Reuters)