Prime Highlights-
- Saudi Arabia’s GDP grew 3 percent year on year in the first quarter of 2026, with non-oil activities contributing the largest share of growth at 1.7 percentage points.
- On a quarterly basis, GDP fell 1.2 percent, pulled down by a 6.8 percent drop in oil activities compared to the fourth quarter of 2025.
Key Facts-
- Finance, insurance and business services posted the strongest annual growth among all sectors in Q1 2026 at 5.4 percent.
- Government final consumption expenditure rose 11.3 percent year on year, while gross fixed capital formation increased 3.9 percent from the same period in 2025.
Background-
The Saudi economy posted 3 percent annual growth in the first quarter of 2026, with non-oil industries accounting for much of the increase, according to government data.
Both oil and non-oil activities posted annual growth of 2.9 percent in the three months to March 31, while government activities rose 1.5 percent. Non-oil activities contributed 1.7 percentage points to overall GDP growth, the largest share among all major sectors, as the Kingdom pushes ahead with its Vision 2030 diversification agenda.
On a quarterly basis, GDP fell 1.2 percent compared to the fourth quarter of 2025. A 6.8 percent quarter-on-quarter drop in oil activities drove that decline, though gains of 1.4 percent in government activities and 0.3 percent in non-oil activities cushioned part of the fall.
Among individual sectors, finance, insurance and business services led all annual growth at 5.4 percent. Non-refining manufacturing expanded 4 percent, while crude oil and natural gas activities increased by 3.6 percent. Transport, storage and communication activities rose 3.3 percent.
On the spending side, government final consumption expenditure jumped 11.3 percent year on year. Private final consumption expenditure climbed 5.3 percent from a year earlier, and gross fixed capital formation, a key investment measure, rose 3.9 percent compared to the same period in 2025.
The OECD expects Saudi Arabia’s economy to grow 3.2 percent this year and accelerate to 4.3 percent in 2027. The IMF put its 2026 growth estimate at around 2 percent, contingent on shipping through the Strait of Hormuz returning to normal amid regional tensions. The IMF noted the Kingdom’s economy stays resilient, backed by low government debt, strong reserves and a large sovereign wealth fund.
