Fall in oil output to slow down Saudi GDP growth to 3.1% in 2023
Saudi Arabia’s economy is projected to grow at a slower pace of 3.1% in 2023 compared to a robust 8.7% growth recorded last year, according to London-based data and analytics firm GlobalData.
The reduction in oil production, in line with the decision by OPEC+ to cut oil production until 2023-end, is expected to impact the kingdom’s economy as the oil sector accounts for more than 45% of its GDP.
Additionally, the slowdown in economic activities and subdued external demand will likely affect the country’s trade prospects.
Bindi Patel, Economic Research Analyst at GlobalData, stated that the subdued economic activities in Europe and the Americas are expected to slow Saudi Arabia’s export growth to 5.9% in 2023 from 6.3% in 2022 and 47.1% in 2021.
On the other hand, benign inflation rate (2.6% in 2023 forecast vs. 2020-22 average of 3%) and declining unemployment rate (6% vs. 6.8%) are projected to keep the domestic demand buoyed with real household consumption expenditure likely to grow by 4.4% in 2023 compared to 3.7% in 2022, she added.
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