Saudi Arabia's Q1 GDP shrinks by estimated 1.8% y/y as oil sector weighs
Adds context and quote, paragraphs 4-9
RIYADH, May 1 (Reuters) -Saudi Arabia's real gross domestic product (GDP) decreased 1.8% year-on-year in the first quarter, flash estimates by the government's statistical authority showed on Wednesday, as a decline in oil activities continued to hurt overall growth.
The kingdom's GDP had shrunk 3.7% in the fourth quarter of 2023, as cuts to oil production and lower crude prices weighed on the economy.
Saudi Arabia, the world's largest oil exporter, is pumping around 9 million barrels per day (bpd), well below its around 12 million bpd capacity after it cut production as part of an agreement with OPEC and other oil producers.
Saudi Arabia needs hundreds of billions of dollars to fund its plan to diversify its economy away from oil, known as Vision 2030, which aims to expand the private sector and boost the non-oil economy.
With a projected budget deficit of 79 billion riyals, Saudi Arabia has announced delays to some of its multiple-billion-dollar mega projects.
"There are challenges... we don't have ego, we will change course, we will adjust, we will extend some of the projects, we will downscale some of the projects, we will accelerate some of the projects," Saudi Arabia' Finance Minister Mohammed Al Jadaan said on Sunday, speaking at the World Economic Forum meeting in Riyadh.
Brent crude has averaged around $83.50 so far in 2024, while Saudi Arabia needs oil at $96.2 to balance its 2024 budget, the IMF forecasts.
The kingdom has already tapped debt markets for $12 billion so far this year to help plug the projected deficit in 2024 as it boosts spending to bolster the domestic economy.
Saudi Arabia's over $700 billion sovereign wealth fund, the Public Investment Fund (PIF), raised $5 billion through the sale of a triple-tranche conventional bond in January and $3.5 billion from a sukuk deal in October, and plans to further tap the debt market this year. State oil giant Aramco has announced plans to issue a bond this year.
Oil activities were down 10.6% in the first quarter compared with the previous year, estimates from the General Authority for Statistics showed, while non-oil GDP grew 2.8% year-on-year and government activities increased 2%.
On a quarterly basis, seasonally adjusted growth was up 1.3% from the previous quarter, driven by a 2.4% increase in oil activities and a 0.5% growth in non-oil activities, although government activities decreased by 1%.
The kingdom's economy contracted 0.9% in 2023, the data showed, pulled lower by the oil sector, while non-oil activities grew by 4.6% last year.
This marks a sharp contrast to 2022, when Saudi Arabia was the G20 group's best performing economy, boosted by an oil price windfall, which allowed it to achieve growth of 8.7% and its first fiscal surplus in almost a decade.
Reporting by Pesha Magid
Editing by Tomasz Janowski and Ros Russell
Dernières actualités
Avertissement : Les entités de XM Group proposent à notre plateforme de trading en ligne un service d'exécution uniquement, autorisant une personne à consulter et/ou à utiliser le contenu disponible sur ou via le site internet, qui n'a pas pour but de modifier ou d'élargir cette situation. De tels accès et utilisation sont toujours soumis aux : (i) Conditions générales ; (ii) Avertissements sur les risques et (iii) Avertissement complet. Un tel contenu n'est par conséquent fourni que pour information générale. En particulier, sachez que les contenus de notre plateforme de trading en ligne ne sont ni une sollicitation ni une offre de participation à toute transaction sur les marchés financiers. Le trading sur les marchés financiers implique un niveau significatif de risques pour votre capital.
Tout le matériel publié dans notre Centre de trading en ligne est destiné à des fins de formation / d'information uniquement et ne contient pas – et ne doit pas être considéré comme contenant – des conseils et recommandations en matière de finance, de fiscalité des investissements ou de trading, ou un enregistrement de nos prix de trading ou une offre, une sollicitation, une transaction à propos de tout instrument financier ou bien des promotions financières non sollicitées à votre égard.
Tout contenu tiers, de même que le contenu préparé par XM, tels que les opinions, actualités, études, analyses, prix, autres informations ou liens vers des sites tiers contenus sur ce site internet sont fournis "tels quels", comme commentaires généraux sur le marché et ne constituent pas des conseils en investissement. Dans la mesure où tout contenu est considéré comme de la recherche en investissement, vous devez noter et accepter que le contenu n'a pas été conçu ni préparé conformément aux exigences légales visant à promouvoir l'indépendance de la recherche en investissement et, en tant que tel, il serait considéré comme une communication marketing selon les lois et réglementations applicables. Veuillez vous assurer que vous avez lu et compris notre Avis sur la recherche en investissement non indépendante et notre avertissement sur les risques concernant les informations susdites, qui peuvent consultés ici.
