Saudi Arabia’s real GDP shrinks by 0.3% in Q2 2024, oil weighs

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Saudi Arabia’s economy contracted by 0.3 per cent in 2023 compared with a year earlier, as a decline in oil activities by 8.9 per cent year-on-year (YoY) continued to weigh on overall growth.

The latest data from the General Authority for Statistics shows that the kingdom’s seasonally adjusted real gross domestic product (GDP) grew by 1.4 per cent compared to Q1 2024, as non-oil activities rose by 4.9 per cent YoY and 2.1 per cent quarter-on-quarter (QoQ).

Saudi Arabia’s statistics agency said GDP at current prices reached SAR1.02tn in Q2 2024, with crude oil and natural gas activities contributing 23.2 per cent to overall GDP – the highest – followed by government at 16.0 per cent.

Meanwhile, the International Monetary Fund (IMF) sees the kingdom’s oil revenue rising to 2026 before declining quicker than previously expected through the end of the decade.

The fund projected that oil revenue will rise to SAR783bn to make up about 26 per cent of GDP in 2026, the IMF said in a report after its annual consultations with the government in Riyadh. The earnings are seen dipping to SAR778bn in 2029, 4.1 per cent less than earlier estimates.

The IMF sees Saudi Arabia’s oil production at 9 million barrels a day this year, rising to 10.2 million in 2026 and 11 million in 2029. The kingdom needs oil prices at $96 a barrel to balance its budget, which is more than $20 higher than the global benchmark Brent’s current levels.

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