Saudi GDP growth ticks along nicely on oil and higher capex

Saudi GDP growth ticks along nicely on oil and higher capex

Saudi Arabia’s General Authority for Statistics released initial estimates of real GDP scores for the first quarter 2023, which show the economy grew at a pace of 3.9 per cent. While this marks a slowdown in pace to the 5.5 per cent growth the previous quarter, economic activity is projected to grow further over the rest of the year. The non-oil revenues increased 9 per cent in Q1 2023 while oil revenues declined by 3 per cent. This is in line with the Saudi Vision 2030 under which the country aims to diversify non-oil exports and increase its share of non-oil GDP from 16 per cent to 50 per cent. The surprise decision by OPEC+ to slash oil production will exert near-term pressure on the Kingdom’s oil GDP growth. Nevertheless, any subsequent spike in oil prices arising from lower supply is expected to bolster the non-oil sector. That being said, Saudi’s oil revenues remain healthy. For instance, nearly all of Japan’s crude imports in March stemmed from the Middle east, with Saudi Arabia accounting for nearly 42 per cent of Japan’s total imports amounting to 32.77 million barrels. According to the Ministry of Finance, Saudi Arabia reported a budget deficit