The Saudi economy shrank by 0.5 percent in 2017 for the first time in eight years due to a drop in oil production, the finance ministry said on Tuesday.

The last time the OPEC kingpin's economy contracted was in 2009, when gross domestic product dropped 2.1 percent after the global financial crisis sent oil prices crashing.

The world's leading crude exporter announced an expansionary budget on Tuesday in a bid to stimulate the sluggish economy.