Saudi economy contracts on lower oil price and production

RIYADH: Saudi Arabia’s economy contracted in the first two quarters this year, official figures show.
General Authority for Statistics figures show that gross domestic product shrank by 2.3 percent in the second quarter compared with the first three months of 2017, mainly over low oil prices and less production.
GDP in the first quarter contracted by 3.7 percent compared with the last quarter of 2016.
Saudi Arabia, the world’s top oil exporter and the largest economy in the Middle East, has taken a series of austerity measures since oil prices collapsed in mid-2014.
Until 2014, oil income made up more than 90 percent of public revenues.
The kingdom has since concentrated on diversification, including plans to introduce value-added tax and privatise part of state-owned oil giant Aramco.
Oil prices have partly recovered after major producers inside and outside OPEC, including Saudi Arabia, agreed last year to cut output by 1.8 million barrels per day to bolster global prices.
Producers agreed to extend the cuts for nine more months, ending in March 2018. OPEC will discuss the possibility of a further extension at a ministerial meeting next month.
The International Monetary Fund has forecast that the country’s economy will grow by 0.1 percent this fiscal year, down from 1.7 percent in 2016 and 3.4 percent the previous year.