Saudi Arabia’s non-oil sector experiences 2.2 percent increase in June

(MENAFN) In June, Saudi Arabia’s non-oil sector experienced a 2.2 percent increase compared to the previous month, reflecting continued growth in the Kingdom's efforts to diversify its economy away from oil dependence. This rise in non-oil activities highlights the progress being made in expanding other economic sectors.

However, the Kingdom’s Industrial Production Index (IPI) reported a decline of 1.6 percent in June, which is attributed to the reduction in oil output agreed upon by OPEC. The year-on-year comparison reveals a more significant drop, with the IPI falling 4 percent from June 2023. The IPI, as defined by the General Authority for Statistics (GASTAT), measures changes in industrial output volume and is derived from data collected through industrial production surveys.

GASTAT also noted an 11.3 percent decrease in Saudi Arabia’s mining and quarrying activities in June compared to the same month the previous year. This decline is linked to the Kingdom’s decision to cut crude oil production as part of the OPEC+ agreement. In April 2023, Saudi Arabia reduced its oil output by 500,000 barrels per day, a cut that has now been extended through December 2024 to stabilize the global oil market.

GASTAT explained that the mining and quarrying sector, which represents 61.4 percent of the IPI's weight, significantly influences the overall trend of the industrial production index. This is followed by the manufacturing industry, which holds a 35 percent weight, and the electricity, gas, steam, and air conditioning supply sectors, which contribute 2.8 percent.

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