Saudi Arabia's oil cuts weigh heavy on economy, GDP tanks by 4.5%
The kingdom's economy shrunk by the most since the COVID-19 pandemic in 2020 due to energy measures.
Saudi Arabia’s real gross domestic product (GDP) fell by 4.5% in the third quarter of this year, according to preliminary government data released Tuesday, as voluntary oil cuts by the world’s largest crude exporter weighed on the economy.
The kingdom was the fastest-growing economy in the G20 group of nations last year, reaching 8.7% growth as oil climbed to around $100 per barrel and the Gulf state recorded its first budget surplus in a decade. Saudi GDP also passed $1 trillion for the first time.
But in the third quarter of this year, Saudi Arabia’s economy shrunk by the most since the COVID-19 pandemic in 2020, due to oil cuts. It was also the first output drop since 2021. Brent crude was $87.50 as of 1:45 pm Eastern Time on Tuesday.
Data from the General Authority for Statistics on Tuesday showed that oil activities contracted by 17.3% in the third quarter compared to the same quarter of 2022, causing overall growth to decline despite non-oil growth of 3.6% and government activities expanding by 1.9%.
