Saudi GDP Contracts 4.7% in Q2 2026 on Oil Decline

Saudi Arabia's economy contracted in the second quarter of 2026, as a sharp fall in oil output weighed on overall output even as non-oil and government activity kept expanding.

Real gross domestic product fell 4.7% year on year in Q2 2026, driven mainly by a 24.8% decline in oil activities. On a seasonally adjusted basis, real GDP dropped 4.8% compared with the previous quarter.

Away from oil, the picture was more resilient. Non-oil activities grew 0.6% year on year during the same period, while government activities rose 0.9%. The continued growth in these segments helped offset part of the drag caused by weaker oil production.

Why it matters

For residents and businesses in the Kingdom, the split between oil and non-oil performance is significant. The non-oil private sector is a key measure of how the broader economy — including retail, services, and jobs that most residents rely on — is holding up, independent of swings in global oil markets and production levels.

The figures underline the ongoing effort to broaden the economy beyond crude oil, a central aim of national development plans. While the headline contraction reflects lower oil activity, the steady expansion of non-oil and government sectors points to underlying momentum in the parts of the economy closest to everyday life in cities such as الرياض and جدة.

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