Saudi GDP Contracts 4.8% in Q2 2026 on Oil Drop

Saudi Arabia's real gross domestic product (GDP) contracted 4.8% year-on-year in the second quarter of 2026, The decline was driven almost entirely by weaker oil output, while the non-oil economy continued to expand slightly.

Oil activities fell 24.7% year-on-year during the quarter, subtracting roughly 5.4 percentage points from headline growth — more than the total 4.8% contraction recorded across the whole economy. In contrast, non-oil activities grew 0.6% year-on-year, and government activities rose 0.9%.

On a seasonally adjusted quarter-on-quarter basis, real GDP fell 4.9% compared with the first quarter of 2026. Oil activities dropped about 21–22% over the same period, while non-oil activities slipped 0.5% — a quarterly contraction despite their positive annual reading.

Why it matters

The figures mark the steepest quarterly contraction since the pandemic-hit second quarter of 2020, and the first year-on-year contraction since the fourth quarter of 2023. The numbers underline how heavily overall growth still moves with oil production, even as efforts to diversify the economy continue.

For residents and businesses, the near-flat performance of the non-oil sector is the figure to watch. While its slight annual growth points to ongoing activity outside oil, the small quarterly dip suggests momentum eased in the second quarter. These flash estimates are preliminary and may be revised as more complete data becomes available.

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