Saudi Arabia’s economy is in a recession and, with oil output cuts extended until the end of this year at least, GDP will contract further. We think that the economy will shrink by 1.3% this year which is towards the bottom of the consensus range and would be the worst performance among the Gulf economies in 2023. Nonetheless, this weakness is being driven by lower oil output. The non-oil economy has performed well. And with the government committed to sustaining its loose fiscal stance over the coming years, economic growth will pick up over 2024-25.
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