RIYADH: Saudi Arabia’s mining and quarrying sector drove industrial production in December 2023, contributing to a 0.4 percent increase in the monthly index, official data showed.
According to the latest report released by the General Authority for Statistics, the manufacturing sector’s growth remained unchanged in December compared to November, while electricity and gas supplies declined.
However, the month-on-month increase in the industrial production index was driven by the mining and quarrying sector, which rose by 1.4 percent.
The IPI, an economic indicator, reflects relative changes in the volume of industrial output, calculated based on the production survey.
Conversely, the Kingdom’s IPI decreased by 10.5 percent in December 2023 compared to the previous year’s same month.
As per GASTAT, the decline in IPI was mainly attributed to Saudi Arabia’s decision to reduce oil output, in line with the agreement made by the Organization of the Petroleum Exporting Countries and its allies, known as OPEC+.
In December 2023, mining and quarrying in Saudi Arabia decreased by 14.3 percent compared to the same period the previous year, reflecting the country’s reduced oil production to 8.9 million barrels per day.
In April, Saudi Arabia decided to reduce oil output by 500,000 bpd, a measure extended until the end of December 2024.
Additionally, to ensure market stability, the Kingdom pledged an additional oil output cut of 1 million bpd in July, continuing until the end of December 2023.
“The index had peaked in early 2022, supported by growth rates of mining and quarrying activities, and manufacturing activities during that year. Since then, and in particular, in 2023, growth rates went down, mainly driven by mining and quarrying,” said the report.
Similarly, manufacturing activities decreased by 3.3 percent in December 2023 compared to the same month of the previous year, while electricity and gas supplies increased by 25.8 percent.
Furthermore, the report indicated that the relative weights of the mining and quarrying, manufacturing, and electricity and gas supply sectors in the IPI were 74.5 percent, 22.6 percent, and 2.9 percent, respectively.
As a result, the IPI in the mining and quarrying sector dominates the trend in the general index, as added by GASTAT.
Source: Arab News