Saudi Arabia’s economy experienced further setback
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The General Authority for Statistics launched in the past few days its estimate for the GDP of the Saudi Arabian market and highlighted a decreased by 3.7% in the fourth quarter of 2023 compared to the same period of the year before. This decline is less severe than the 4.4% decrease witnessed in the third quarter of the year.
As for the full year, the Saudi Arabia’s economy shrank 0.9%, according to government data.
The drop in GDP was primarily due to a 16.4% fall in oil-related activities. In contrast, non-oil sectors and government activities generated a growth of 4.3% and 3.1%, respectively, compared to the previous year.
Throughout the past year, as the world’s top oil exporter, Saudi Arabia tried to actively reduce its oil output to elevate prices. It has also taken on the majority of the voluntary extra crude production cuts agreed upon by the Organization of the Petroleum Exporting Countries and its allies.
The petroleum sector is a critical component of Saudi Arabia’s economy, contributing with 42% to its GDP.
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Employment grew for the 16th consecutive month as companies expanded.
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According to a recent PMI report, Qatar experienced its fastest non-energy sector growth in almost two years in June, driven by surges in both existing and new business activities.
The Purchasing Managers’ Index (PMI) headline figure for Qatar reached 55.9 in June, up from 53.6 in May, with anything above 50.0 indicating growth in business activity. Employment also grew for the 16th month in a row, and the country’s 12-month outlook remained robust.
The inflationary pressures were muted, with input prices rising only slightly since May, while prices charged for goods and services fell, according to the Qatar Financial Centre (QFC) report.
This headline figure marked the strongest improvement in business conditions in the non-energy private sector since July 2022 and was above the long-term trend.
The report noted that new incoming work expanded at the fastest rate in 13 months, with significant growth in manufacturing and construction and sharp growth in other sectors. Despite the rising demand for goods and services, companies managed to further reduce the volume of outstanding work in June.
Companies attributed positive forecasts to new branch openings, acquiring new customers, and marketing campaigns. Prices for goods and services fell for the sixth time in the past eight months as firms offered discounts to boost competitiveness and attract new customers.
Qatari financial services companies also recorded further strengthening in growth, with the Financial Services Business Activity and New Business Indexes reaching 13- and nine-month highs of 61.1 and 59.2, respectively. These levels were above the long-term trend since 2017.
Yousuf Mohamed Al-Jaida, QFC CEO, said the June PMI index was higher than in all pre-pandemic months except for October 2017, which was 56.3. “Growth has now accelerated five times in the first half of 2024 as the non-energy economy has rebounded from a moderation in the second half of 2023,” he said.
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