Saudi Real GDP Contracts 4.7% in Q2 2026 on Oil Drop

Saudi Arabia's economy contracted in the second quarter of 2026, with real gross domestic product falling about 4.7% year-on-year compared with the same period of 2025, The decline was driven mainly by a sharp drop in oil activities.

Oil activities fell by roughly 24.8% year-on-year during the quarter, the main factor behind the overall contraction. In contrast, non-oil private activities grew about 0.6% and government activities expanded around 0.9% over the same period, showing continued momentum outside the energy sector.

On a seasonally adjusted quarter-on-quarter basis, real GDP declined around 4.8% compared with the first quarter of 2026. Oil activities dropped about 21.5% quarter-on-quarter, while non-oil activities eased slightly by around 0.4% and government activities posted small positive growth of roughly 0.2%.

Despite the contraction in real terms, GDP at current prices reached about SAR 1.26 trillion in the second quarter of 2026, up nearly 7.5% year-on-year.

Why it matters

This is described as the largest quarterly contraction in several years and the first real GDP decline in about two-and-a-half to three years, linked chiefly to lower oil activity rather than a slowdown in the wider economy. For residents and businesses, the continued growth of the non-oil private and government sectors signals that everyday economic activity outside oil remains steady.

The figures are flash (preliminary) estimates issued by the national statistics authority and are subject to revision as more complete data becomes available.

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