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Saudi Arabia reduced its oil output by 500,000 barrels per day in April 2023 Image Credit: AWS

Dubai: Saudi Arabia’s economy grew by 1.4 per cent in the first quarter of 2024, outpacing the overall G20.

The Organisation for Economic Co-operation and Development’s latest gross domestic product (GDP) report for G20 countries shows that Saudi Arabia rebounded from a 0.6 per cent contraction in the previous quarter.

The G20 or Group of 20 is an intergovernmental forum comprising 19 sovereign countries, the European Union, and the African Union. It works to address major issues related to the global economy, such as international financial stability, climate change mitigation and sustainable development. The G20 was founded in 1999.

GDP across the G20 grew by 0.9 per cent quarter-on-quarter in the first quarter of 2024, up from 0.7 per cent in the previous quarter.

The report noted that while Saudi Arabia saw significant recovery, other G20 countries experienced varied economic conditions. Year-on-year, G20 GDP grew by 3.3 per cent in the first three months of 2024, maintaining the same growth rate as the previous quarter.

Among G20 economies, India recorded the highest year-on-year growth at 8.4 per cent in the first quarter of 2024, followed by Turkey at 7.4 per cent. Conversely, Saudi Arabia saw the most significant year-on-year decline, with a 1.5 per cent drop.

A separate report by the General Authority for Statistics (GASTAT) released in early June indicated that Saudi Arabia’s non-oil activities rose by 0.9 per cent in the first three months of 2024 compared to the previous quarter. Non-oil activities also increased by 3.4 per cent year-on-year in the first quarter of 2024.

GASTAT reported that Saudi Arabia’s GDP amounted to $270 billion (Dh991.7 billion) in the first quarter. “Crude oil and natural gas activities contributed 23.4 per cent to GDP, followed by government activities at 15.8 per cent, and wholesale and retail trade, restaurants, and hotels activities at 10.4 per cent,” stated GASTAT.

Strengthening the non-oil private sector is vital for Saudi Arabia as the Kingdom diversifies its economy to reduce its long-standing reliance on oil, which is part of its Saudi Vision 2030.

What is Saudi Vision 2030?
The Saudi Vision 2030 is a programme launched by the government in 2016, with the main aim of diversifying its economy away from the oil sector. It has three main pillars - a vibrant society, a thriving economy, and an ambitious nation.

The report also noted that government activities in Saudi Arabia rose by 2 per cent year-on-year in the first quarter but declined by 1.1 per cent quarter-on-quarter. Saudi Arabia’s oil activities increased by 1.7 per cent in the first quarter compared to the previous quarter, but dipped by 11.2 per cent year-on-year as the country reduced its crude production in line with OPEC+ or the Organisation of the Petroleum Exporting Countries, which is an organisation enabling the co-operation of leading oil-producing and oil-dependent countries in order to collectively influence the global oil market and maximise profit. It was founded on September 14, 1960, in Baghdad, Iraq.

To maintain market stability, Saudi Arabia reduced its oil output by 500,000 barrels per day in April 2023, extending this cut until December 2024.