DUBAI, Jan 31 Reuters Saudi Arabia39;s real gross domestic product GDP shrunk 3.7 in the fourth quarter, government data showed on Wednesday, marking a second consecutive quarter of contraction, as a decline in oil activities weighed.

The kingdom39;s GDP shrunk 4.4 in the third quarter of 2023, its first quarterly contraction since the COVID19 pandemic, hurt by cuts to oil production and lower crude prices.

Saudi Arabia, the world39;s largest oil exporter, is pumping around 9 million barrels per day bpd, well below its around 12 million bpd capacity after it cut production as part of an agreement with OPEC and other oil producers.

The government has ordered state firm Aramco to halt its oil expansion plan and to keep maximum capacity at 12 million barrels per day, 1 million bpd below a target announced in 2020, the company said on Tuesday.

Oil activities were down 16.4 in the fourth quarter versus the previous year, estimates from the General Authority for Statistics showed, while nonoil GDP grew 4.3 year on year and government activities increased 3.1.

The kingdom39;s economy contracted 0.9 in 2023, the data showed, pulled lower by the oil sector while nonoil activities grew by 4.6.

In its latest budget, the government had estimated overall GDP growth of 0.03 in 2023, with nonoil growth forecast at almost 6. It projects growth of 4.4 this year.

The International Monetary Fund on Tuesday estimated Saudi Arabia39;s economy contracted 1.1 in 2023, adding this would…