Saudi Industrial Production Rises to the Highest Since Late 2022

Saudi Arabia’s industrial production rose to the strongest level in nearly three years, in line with an increase in the kingdom’s economic growth for the same period and driven by an expansion in oil output.

A measure looking into the Gulf country’s industrial production accelerated 7.9% on an annual basis by the end of the second quarter, fuelled by an increase in manufacturing activities, according to data by the General Authority for Statistics.

Industrial production is based on the value of output in several industries including mining and quarrying, manufacturing and public utilities such as electricity, gas and water supply.

Saudi gross domestic product rose nearly 4% year-on-year in the three months through June, preliminary data showed, driven by steady growth in the non-oil sector and a return to expansion for oil activities, as the kingdom boosts output under new Opec+ supply policy.

The kingdom’s oil economy swung back to expansion after contracting in the first quarter as the Organisation of the Petroleum Exporting Countries, led by Saudi Arabia and Russia, opened the taps in recent months after years of supply restraint.

Saudi Arabia heavily depends on oil prices to sustain economic momentum. The Gulf nation’s fiscal breakeven oil price now stands at $96 a barrel, Bloomberg Economics estimates. That’s higher than a decade ago and if domestic investment by the sovereign wealth fund is included, the figure is $113.