10/06/2026 04:27 AST
Saudi Arabia's real gross domestic product expanded by 3 percent year on year in the first quarter of 2026, supported by growth across all major economic activities, official data showed.
According to the latest report by the General Authority for Statistics, both oil and non-oil activities grew 2.9 percent annually in the three months to March 31, while government activities increased 1.5 percent.
Non-oil activities contributed 1.7 percentage points to overall GDP growth, the largest share among the economy's major sectors, as the Kingdom seeks to diversify its revenue streams as part of its Vision 2030 strategy.
The data also broadly align with projections from the Organization for Economic Co-operation and Development, which expects the Kingdom's economy to grow by 3.2 percent this year before accelerating to 4.3 percent in 2027.
In its latest report, GASTAT noted that on a seasonally adjusted basis, GDP decreased by 1.2 percent in the first quarter of 2026 compared to the fourth quarter of 2025.
It added: "This decline was primarily attributable to a 6.8 percent quarter-on-quarter decrease in oil activities, which was partially offset by increases of 1.4 percent in government activities and 0.3 percent in non-oil activities."
While annual growth remained positive, the quarterly decline underscores the continued influence of oil production trends on the Kingdom's economic performance.
Earlier in June, the International Monetary Fund said Saudi Arabia's economy is expected to expand by around 2 percent this year, assuming shipping through the Strait of Hormuz normalizes in the coming months amid ongoing regional tensions.
The IMF added that the Kingdom's economy remains resilient despite disruptions caused by conflict in the Middle East, supported by strong fundamentals, low government debt, ample foreign reserves and the backing of a large sovereign wealth fund.
According to the GASTAT report, oil activities contributed 0.8 percentage points to GDP growth in the first quarter, followed by government activities at 0.3 percentage points and net taxes on products at 0.2 percentage points.
On a quarter-on-quarter basis, oil activities subtracted 1.6 percentage points from growth, while non-oil and government activities each made a positive contribution of 0.2 percentage points.
Among individual sectors, finance, insurance and business services posted the strongest annual growth in the first quarter at 5.4 percent. Manufacturing activities excluding petroleum refining expanded 4 percent, while crude petroleum and natural gas activities grew 3.6 percent.
Transport, storage and communication activities increased 3.3 percent, while other mining and quarrying activities rose 3 percent.
On the expenditure side, government final consumption expenditure increased by 11.3 percent year on year and 8.5 percent quarter on quarter during the first three months of 2026.
Private final consumption expenditure rose 5.3 percent from a year earlier and 4.8 percent from the previous quarter.
Gross fixed capital formation, a key measure of investment in the economy, increased 3.9 percent compared with the first quarter of 2025 and rose 7.5 percent from the previous three-month period.
Arab News
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