Saudi Economy Contracts as Oil Output Plummets 24.8%

Saudi Arabia's economy contracted in Q2 as a sharp cut in oil output outweighed small gains elsewhere, according to final figures from the government's statistics agency.

The real gross domestic product fell 4.7% year over year in Q2, slightly better than an earlier estimate but still a significant slowdown from the prior quarter's growth.

The decline was largely driven by oil activities, which dropped 24.8%, subtracting 5.4 percentage points from headline growth. Non-oil and government activities each grew 0.9%, while some services sectors saw expansion - community, social, and personal services rose 4.1% and finance, insurance, and business services grew 3.3%.

The oil sector's dominance over the economy remains a challenge for Saudi Arabia's diversification push, with its swings still able to swamp modest growth elsewhere. The non-oil engine isn't yet a reliable shock absorber, growing just 0.9% year over year and slipping 0.4% from Q1 after seasonal adjustments.