Saudi GDP Seen Contracting 3.6% in 2026 as Non-Oil Grows

Preliminary estimates indicate that Saudi Arabia's real Gross Domestic Product (GDP) is projected to contract by 3.6% in 2026, driven mainly by a sharp fall in oil activity, even as the non-oil economy continues to grow.

oil activity is expected to decline by roughly 21.8% over the year. In contrast, non-oil activity is projected to expand by around 3.2%, continuing a steady upward trend across the Kingdom's diversified sectors.

Non-oil activity grew by 1.8% in the first half of 2026 and accounted for 57.3% of real GDP during that period — a clear sign that sectors beyond oil are becoming an increasingly central pillar of the national economy.

Why it matters

The headline contraction reflects the heavy weight of oil output in the overall GDP calculation, rather than weakness in the wider economy. For residents and businesses across Riyadh, Jeddah, Dammam and beyond, the continued growth of non-oil sectors signals ongoing demand in services, retail, tourism and other everyday industries that drive jobs and activity.

These numbers are preliminary and reflect current economic and geopolitical developments. Earlier forecasts for 2026 had pointed to overall GDP growth, while the 3.6% contraction represents the later revised estimate. The expansion of the non-oil economy remains aligned with the broader goals of رؤية السعودية 2030 to diversify income sources and reduce reliance on oil.

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