{"id":87009,"date":"2024-06-10T00:00:00","date_gmt":"2024-06-10T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/ksa\/2024\/06\/10\/gdp-shrinks-1-7-y-o-y-in-1q-2024\/"},"modified":"2024-06-10T00:00:00","modified_gmt":"2024-06-10T00:00:00","slug":"gdp-shrinks-1-7-y-o-y-in-1q-2024","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/ksa\/2024\/06\/10\/gdp-shrinks-1-7-y-o-y-in-1q-2024\/","title":{"rendered":"GDP shrinks 1.7% y-o-y in 1Q 2024"},"content":{"rendered":"

The Saudi economy contracted at a slightly slower pace in 1Q 2024 than<\/strong> initially <\/strong>reported<\/strong>, with GDP falling 1.7% y-o-y to SAR 1 bn, according to the latest Gastat data (pdf)<\/a>. The authority had initially forecasted a 1.8% y-o-y drop<\/a>, driven largely by a decline in oil activity.<\/p>\n

(** Tap or click the headline above to read this story with all of the links<\/strong> to our background and outside sources.)<\/p>\n

Non-oil activity rose 3.4% y-o-y during the quarter<\/strong>, up from Gastat\u2019s previous estimate of 2.8%. This was driven by 5.9% y-o-y growth in wholesale and retail, followed by a 5% increase in transportation, storage and communication. <\/p>\n

REMEMBER- Non-oil growth is central to the government\u2019s diversification push<\/strong>, designed to reduce the economy's reliance on oil revenues. The latest PMI data<\/a> showed that private sector activity grew at a slower pace in May, as local demand lost some steam, but remained firmly in growth territory.<\/p>\n

So, why is GDP shrinking? <\/strong>Oil activity was down 11.2% y-o-y last quarter. Given the weight of oil on the overall domestic economy \u2014 which accounted for 23.4% of GDP in 1Q \u2014 the y-o-y downtick dragged down the entire aggregate figure for the quarter. <\/p>\n

IN CONTEXT- The Kingdom has voluntarily cut oil production by 1 mn barrels per day to <\/strong>stabilize the global market<\/strong>, as per its ongoing agreement with OPEC+ to slash oil production by a combined 3.7 mn barrels per day<\/a> until October of this year.<\/p>\n

On a quarterly basis:<\/strong> GDP climbed 1.4% compared to 4Q 2023, driven primarily by a 1.7% q-o-q increase in oil activity as well as 0.9% growth in non-oil activity. Government activity slowed by 1.1% q-o-q. <\/p>\n

The outlook:<\/strong> The government is gunning for GDP growth to hit 4.4-5.0%<\/a> for the current fiscal year, Finance Minister Mohamed Al Jadaan said back in December<\/a>. Meanwhile, the IMF revised its 2024 growth forecast for the Kingdom to 2.6% in April, pointing to the combined effects of lower oil prices and production cuts.<\/p>\n

The non-oil outlook:<\/strong> The World Bank<\/a> \u2014 and more recently Riyadh Bank<\/a> \u2014 expect the local non-oil economy to grow a strong 4.8% this year, up from 4.4% in 2023.<\/p>\n","protected":false},"excerpt":{"rendered":"

Non-oil activity grew 3.4% y-o-y in 1Q 2024<\/p>\n","protected":false},"author":1,"featured_media":87010,"comment_status":"","ping_status":"open","sticky":false,"template":"single-feature.php","format":"standard","meta":{"_acf_changed":false,"newspack_ads_suppress_ads":false,"newspack_popups_has_disabled_popups":false,"newspack_sponsor_sponsorship_scope":"","newspack_sponsor_native_byline_display":"inherit","newspack_sponsor_native_category_display":"inherit","newspack_sponsor_underwriter_style":"inherit","newspack_sponsor_underwriter_placement":"inherit","ep_exclude_from_search":false,"_primary_brand":0,"newspack_featured_image_position":"","newspack_post_subtitle":"","newspack_article_summary_title":"Overview:","newspack_article_summary":"","newspack_hide_updated_date":false,"newspack_show_updated_date":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[2571],"tags":[27,10,273],"brand":[],"newspack_spnsrs_tax":[],"class_list":["post-87009","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-economy","tag-economy","tag-enterpriseam-ksa","tag-finance-ministry","wpautop","entry"],"acf":{"mongo_id":"5ddc1dba-6aad-4fe6-a686-8e54ad4263e1","order":"3","is_powered_by":false,"story_type":"1","photo_url":"https:\/\/ent.news\/2024\/6\/806.jpg","photo_position":"above","homepage_title":"","full_issue_title":"Saudi economy contracted 1.7% y-o-y in 1Q 2024","related_issue":[87004],"teaser":"Non-oil activity grew 3.4% y-o-y in 1Q 2024","voice_url":"https:\/\/s3.us-east-1.amazonaws.com\/ent.news\/audio\/2024\/6\/.0ad23877-415f-48c7-9eda-75d9171fc885.mp3"},"yoast_head":"\nGDP shrinks 1.7% y-o-y in 1Q 2024 - 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