Gross Domestic Product (GDP) – Fourth Quarter 2019

The “Central Statistical Bureau” published GDP figures at fixed prices for the fourth quarter of 2019. Analyzing these numbers is important in two aspects: the first is to follow their development in terms of their growth i.e. the economic expansion or contraction and the second is monitoring the growth within the components of that output to spot its strengths or weaknesses. More importantly, perhaps, is to follow the impact of public policies on reforming structural economic imbalances.

These figures, at fixed prices -real growth- estimate that negative growth of -1.1% has been achieved between the fourth quarter of 2018 and the fourth quarter of 2019. But what had been achieved was positive growth by 2.6% between the third quarter and the fourth quarter of 2019 due to the expansion of non-oil sectors by 3.5% and oil sectors by 1.8%. The negative growth between the fourth quarter of 2018 and the fourth quarter of 2019 was achieved mostly from the decline of the oil sectors by -2.6%, consequently the overall growth rate decreased to -1.1% as we mentioned, while the non-oil sectors achieved growth by 0.6%.

The dominance of the oil sector on GDP components continues as we have noted. The contribution of the oil sector to fixed prices is still more than half the size of the GDP; it scored around 53.6% in the fourth quarter of 2018 and became 52.8% in the fourth quarter of 2019. This means that the contribution of all other sectors in the fourth quarter of 2019 amounted to 47.2%, which is an unsustainable contribution but it is strongly supported by the oil sector whose volatile contribution is linked only to oil prices and production, and not to the industrial growth. The second highest contribution to GDP components was public administration, defense, and social security at 10.9%, and the sector is irrelevant to any developmental approach.