The General Authority for Statistics in Saudi Arabia has recently transitioned to a new technique for computing the country’s real Gross Domestic Product (GDP). This approach, known as the chain-linking methodology, has been employed to establish the economic figures for the fourth quarter of 2023 and the cumulative data for that year.
With this shift, Saudi Arabia distinguishes itself as the forerunner in both the Gulf and Arab regions to implement chain-linking. It also places the nation among the initial group of G20 countries to utilize this advanced method. Recognized as a sophisticated mechanism for assessing genuine growth rates, chain-linking leverages current year prices and weights as a reference point, offering a more accurate depiction of a country’s economic situation.
Expert statisticians have highlighted the numerous benefits of the chain-linking methodology. This approach accounts for fluctuations in prices and is adaptable to the dynamics of economic activities. It provides continual updates and mirrors economic transitions with higher precision. Additionally, it considers the evolving structure of production and consumption patterns, which facilitates more transparent international economic comparisons.
Global statistical organizations, alongside entities dedicated to national accounting, are advocating for the widespread adoption of the chain-linking methodology. The recommendation is based on its ability to more precisely reflect a nation’s real growth and to efficiently track progress and accomplishments.