Saudi GDP seen contracting 3.6% in 2026 on oil dip

Preliminary estimates point to a 3.6% contraction in Saudi Arabia's real gross domestic product (GDP) in 2026, mainly as a result of weaker oil activity during the year.

oil activity is expected to decline by roughly 21.8% in 2026, which is the primary factor behind the expected overall contraction. In contrast, non-oil activities are forecast to grow by about 3.2%, reflecting continued momentum in the parts of the economy outside the energy sector.

The figures mark a notable shift from the 2026 budget, which had originally projected real GDP growth of 4.6%. Officials have described the new estimate as preliminary, meaning it may be revised as more data becomes available through the year.

Why it matters

For residents and businesses across the Kingdom, the continued expansion of non-oil activity is a key indicator to watch. The projected 3.2% growth in non-oil sectors signals ongoing activity in areas such as services, retail, construction and tourism — segments that directly affect jobs, consumer spending and daily life in cities like Riyadh and Jeddah.

The headline contraction is largely tied to oil output levels rather than a slowdown in the wider domestic economy. As a preliminary projection, the number provides an early snapshot of 2026 rather than a final outcome, and updated estimates are expected as the year progresses.

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