(Bloomberg) — Saudi Arabia’s economy slowed in the second quarter as oil-production cuts and a drop in prices pushed the country from being one of the fastest-growing Group of 20 countries to one of the slowest.
Gross domestic product expanded 1.1% on an annual basis, according to preliminary data released by the General Authority for Statistics. That compares with 3.8% in the previous quarter and 11% a year earlier.
The non-oil sector — where most Saudis are employed and which government wants to develop to diversify the economy — expanded 5.5%. Oil GDP dropped 4.2%.
Earlier this month, the kingdom got the largest downgrade among major economies from the International Monetary Fund. The fund cut the kingdom’s growth outlook for 2023 to 1.9%, a downward revision of 1.2 percentage points from the Washington-based lender’s earlier estimate.
Economic growth reached nearly 9% last year, the fastest in the G-20, driven by record crude output of around 10.5 million barrels a day and prices averaging about $100 a barrel as Russia’s invasion of Ukraine roiled energy markets.
This year, steep cuts in production intended to shore up crude prices have pushed Saudi oil output to the lowest in years. Brent is trading around $84.60 a barrel, down 1.6% since the end of 2022.
Read: Saudi Oil Cuts Throw Last Year’s Standout Economy Into Slow Lane
The $1 trillion economy’s receipts from oil sales abroad declined by more than a third in May to the lowest since September 2021.
—With assistance from Abeer Abu Omar.