Saudi GDP Contracts 4.8% in Q2 2026 as Oil Slides

Saudi Arabia's real gross domestic product contracted by about 4.8% year-on-year in the second quarter of 2026 compared with the same period of 2025, It marks the Kingdom's first real GDP decline in more than two years after a run of quarterly growth.

The contraction was driven almost entirely by the oil sector. Oil activities fell 24.7% year-on-year, subtracting 5.4 percentage points from overall growth. Outside oil, the picture was steadier: non-oil activities grew 0.6% year-on-year, while government activities rose 0.9%.

On a seasonally adjusted quarter-on-quarter basis, real GDP decreased by 4.9% from the first quarter of 2026. Oil activities dropped about 21.5% over the quarter, non-oil activities eased 0.5%, and government activities edged up 0.2%.

Why it matters

For residents and business owners in Riyadh, Jeddah and beyond, the headline decline reflects lower oil output rather than a slowdown in everyday economic life. Non-oil sectors — retail, services, construction and the like — continued to expand, if modestly, which supports the diversification goals at the heart of Saudi Vision 2030.

The figures are preliminary flash estimates and may be revised as more complete data becomes available in the coming weeks. Saudi Living will follow the updated releases and report any significant changes.

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