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Saudi Arabia GDP Q1 2023

Saudi Arabia: GDP growth weakens in Q1

A flash estimate showed that the economy grew 3.9% on an annual basis in Q1, after having expanded 5.5% in Q4.

The oil sector grew 1.3% in Q1 compared to 6.1% in Q4. Growth in the non-oil private sector fell to 5.8% in Q1 from 6.2% in Q4, while government services growth rose to 4.9% in Q1 from 2.9% in Q4.

On a seasonally-adjusted quarter-on-quarter basis, the economy contracted 1.3% in Q1, after having expanded 1.3% in Q4.

The weaker reading was driven by a slowdown in the oil sector, which was hit by lower OPEC quotas. The non-oil sector was more robust, with growth easing only slightly in year-on-year terms and rising slightly in quarter-on-quarter terms. This pattern is set to continue ahead. Oil output will be further knocked from May onward following further cuts to OPEC quotas announced in April, while the non-oil sector will continue to benefit from heavy government investment and low inflation. Looking at the economy as a whole, both year-on-year and quarter-on-quarter growth should continue to ease ahead.

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