This new approach was utilized to determine the Q4 2023 results and the annual figures for the same year, marking a significant shift from the previous fixed base year methodology
RIYADH — The General Authority for Statistics (GASTAT) announced the adoption of the chain-linking methodology for calculating the real Gross Domestic Product (GDP) in Saudi Arabia.
This new approach was utilized to determine the Q4 2023 results and the annual figures for the same year, marking a significant shift from the previous fixed base year methodology.
Saudi Arabia emerges as the first nation in the Gulf and Arab regions, and among the initial G20 countries, to implement this advanced methodology. Chain-linking is recognized for its effectiveness in estimating real growth rates and measuring economic growth using the previous year’s weights and prices as a benchmark. This method offers a more accurate reflection of a country’s current economic conditions.
According to GASTAT, experts note that the chain-linking methodology accounts for price changes and provides flexibility in addressing economic activities. Its continuous updating accurately mirrors economic fluctuations, production structure, and consumption patterns, facilitating clearer international comparisons.
Global statistical organizations and national accounts bodies encourage the adoption of chain-linking over the fixed base year methodology. This recommendation aims to more accurately depict real growth at the national level and enhance the monitoring of economic developments and achievements.
Source: Zawya
