Saudi Arabia's real gross domestic product recorded an annual expansion of 2.8 percent in the first quarter of 2026, driven by gains across all economic activities, according to official data released by the General Authority for Statistics (GASTAT).
Non-Oil Sector Leads Growth
Flash estimates from GASTAT revealed that non-oil activities increased by 2.8 percent year-on-year during the three-month period, highlighting the progress of the Kingdom's economic diversification agenda. Oil activities rose by 2.3 percent, while government activities grew by 1.5 percent compared to the same quarter last year.
The strong economic performance comes amid heightened regional conflicts, underscoring Saudi Arabia's robust financial landscape and the resilience of its non-oil sector. The International Monetary Fund (IMF) earlier this month forecast that the Saudi economy would grow by 3.1 percent in 2026, citing continued strength in domestic activity and ongoing reforms aimed at broadening the economic base.
Contribution to GDP Growth
According to GASTAT, non-oil activities were the main contributor to real GDP growth, adding 1.7 percentage points. Oil activities contributed 0.7 percentage points, government activities added 0.3 percentage points, and net taxes on products contributed 0.2 percentage points.
Jihad Azour, director of the IMF's Middle East and Central Asia Department, noted earlier this month that Saudi Arabia has built strong financial institutions and diversified revenue streams, giving policymakers greater flexibility in navigating regional economic pressures.
Quarter-on-Quarter Contraction
On a seasonally adjusted basis, real GDP contracted by 1.5 percent quarter-on-quarter. This decline was primarily driven by a sharp 7.2 percent drop in oil activities, partially offset by modest increases of 0.2 percent in non-oil activities and 0.8 percent in government activities. Oil activities were the main contributor to the quarterly decline, reducing growth by 1.7 percentage points.
On a positive note, non-oil activities and government activities each contributed 0.1 percentage points to the seasonally adjusted GDP.
Saudi Arabia's strong economic performance in the first quarter follows robust full-year 2025 growth of 4.5 percent, fueled by higher oil output and sustained non-oil momentum. The continued expansion of the non-oil sector underscores the success of Vision 2030 initiatives aimed at reducing the Kingdom's dependence on oil revenues.
