Saudi GDP Contracts 3.8% Year on Year in Third Quarter as Oil Activity Falls
Key Facts
Saudi real gross domestic product contracted 3.8% year on year in the third quarter of 2026, according to a preliminary estimate reported by Argaam, citing data from the General Authority for Statistics. The figures show divergent trends across sectors, with non-oil activity remaining in growth territory despite the overall contraction. The annual change compares the third quarter of 2026 with the same period in 2025. The coverage described the figure as a flash estimate issued before the quarter’s data were complete.
The picture differs when GDP is compared with the previous quarter on a seasonally adjusted basis: it rose 1.3% in the third quarter, after contracting 8.4% in the second quarter. On an annual basis, the second quarter recorded a contraction of 4.7%, before the decline widened to 3.8% in the third quarter. The two measures reflect different comparison periods: quarterly growth tracks the change between consecutive quarters, while the annual measure compares a quarter with the same quarter a year earlier. The third quarter therefore combined quarterly growth with an annual contraction. The divergence underscores the importance of reading both figures together when assessing the direction of activity.
The third-quarter reading follows annual growth of 3.0% in the first quarter of 2026, according to the Saudi Press Agency, citing the General Authority for Statistics. Non-oil activities were the largest contributor to GDP growth during that quarter, adding 1.7 percentage points. The data put the start of the year in a different context from the annual contraction recorded in the third quarter. They also show that non-oil activity continued to contribute to growth in the first quarter, while its growth remained positive in the third quarter, according to the published figures. This comparison alone does not establish the path of each sector’s contribution to the third-quarter annual change.
Against the backdrop of forecasts, the International Monetary Fund said the Saudi economy grew 4.6% in 2025, supported by the easing of OPEC+ production cuts and strong domestic demand. In its 2026 Article IV consultation report, the fund forecast GDP growth of 1.7% in 2026 and 5.5% in 2027. It estimated non-oil GDP growth at 2.6% in 2026, before rising to 4.5% in 2027. These forecasts are based on the report issued in July and do not represent a revision to the third-quarter reading published later. The fund said the conflict and the near-total halt in shipping through the Strait of Hormuz disrupted activity, reduced oil and non-oil exports, and weighed on confidence.
The General Authority for Statistics is scheduled to publish third-quarter GDP and national accounts data on December 8, 2026. That scheduled release is the next step in publishing the quarter’s data, following the flash estimate issued while the period’s data were still incomplete. The planned release will make the quarter’s national accounts available in line with the authority’s schedule. Until then, 3.8% remains the preliminary estimate cited in the published coverage.