Saudi Arabia’s real gross domestic product (GDP) saw a 1.3 percent quarterly increase during Q1 of 2024 due to a 2.4 percent increase in oil activity and a 0.5 percent increase in non-oil activity. However, government activities declined by 1 percent during the period.
Year-on-year, Saudi Arabia’s real GDP saw a 1.8 percent decline during Q1, stated the General Authority for Statistics in its latest report. This annual decline was due to a 10.6 percent decline in oil activities compared to Q1 of 2023. Meanwhile, non-oil activities saw a 2.8 percent annual increase while government activities grew 2 percent during the same period.
Voluntary oil output cuts by OPEC+ members including Saudi Arabia have significant impact on Saudi Arabia’s GDP growth. OPEC+ has implemented a series of output cuts since late 2022 to support the oil market. In November 2023, OPEC+ agreed to cut oil output by about 2.2 million barrels per day following a first cut in July 2023.
Since then, OPEC+ members have extended voluntary oil output cuts of 2.2 million barrels per day into the second quarter of 2024. Saudi Arabia extended its voluntary cuts of 1 million barrels per day, leaving its output at nearly 9 million barrels per day. That is largely below its 12 million barrels per day capacity which has impacted its oil activity and its contributions to the economy.
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Despite the decline in oil activity, Saudi Arabia has recorded continuous growth in non-oil activity due to investments in several sectors including tourism, technology, and industry to propel its ambitious Vision 2030.
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