عربي English Türkçe اردو فارسى
Logo
Latest News
Business

Saudi Economy Defies Forecasts, Posts Fastest Growth in Three Years

A general view of Riyadh, Saudi Arabia. (SPA)
A general view of Riyadh, Saudi Arabia. (SPA)
TT
TT

Saudi Economy Defies Forecasts, Posts Fastest Growth in Three Years

A general view of Riyadh, Saudi Arabia. (SPA)
A general view of Riyadh, Saudi Arabia. (SPA)

Saudi Arabia closed 2025 with economic performance that exceeded expectations, recording an annual growth of 4.5 percent. The result not only surpassed the International Monetary Fund’s latest forecast of 4.3 percent, but also marked the Kingdom’s highest growth rate in three years, compared with 2.7 percent in 2024 and 0.5 percent in 2023.

The figures highlight strong economic resilience and align with the strategic direction outlined by the Ministry of Finance in its 2026 budget statement, which stressed the importance of sustaining growth and broadening its drivers in line with Saudi Vision 2030.

Landmark year

The year 2025 proved to be pivotal in Saudi Arabia’s economic transformation, with annual data showing a clear balance among sectoral contributions. Oil activities recorded the strongest annual growth at 5.6 percent, contributing around 1.4 percentage points to gross domestic product.

Non-oil activities, however, continued to consolidate their role as the main engine of growth, expanding by 4.9 percent and contributing about 2.7 percentage points. Government activities maintained moderate growth of 0.9 percent, according to preliminary estimates released by the General Authority for Statistics.

The Ministry of Finance had projected real GDP growth of 4.6 percent for 2025, driven primarily by non-oil activities, which have increasingly become the backbone of economic activity.

Noticeable acceleration

On a quarterly basis, the fourth quarter of 2025 saw a marked acceleration, with GDP growing by 4.9 percent year on year. Oil activities surged by 10.4 percent, contributing 2.5 percentage points to growth, while non-oil activities expanded by 4.1 percent, adding 2.3 points, reflecting strong integration between the two sectors.

Seasonally adjusted quarter-on-quarter growth reached 1.1 percent in the fourth quarter compared with the third.

Oil activities led with 1.4 percent growth, followed by non-oil activities at 1.3 percent, while government activities edged down by 0.2 percent.

Structural transformation

Financial and economic adviser Dr. Hussein Al-Attas told Asharq Al-Awsat that real GDP growth of 4.5 percent in 2025 reflects the success of economic and fiscal policies in achieving genuine diversification, rather than a cyclical improvement linked solely to oil prices.

He noted that the non-oil sector now accounts for about 55–56 percent of real GDP, growing close to 5 percent in 2025, driven by manufacturing, trade, transport and logistics, tourism, and services. These indicators, he said, point to a real structural shift aligned with Vision 2030, enhancing resilience against oil price volatility.

Sustainable outlook

Al-Attas said sustained growth remains achievable despite oil price fluctuations. While oil will remain influential, the expanding non-oil base has reduced sensitivity to oil cycles, supported by fiscal reforms, privatization, stronger private-sector participation, and foreign investment.

Looking ahead, he expects growth of 4.3–4.6 percent in 2026, with balanced contributions from oil and non-oil sectors.

Global banks, including Standard Chartered, forecast growth near 4.5 percent, underscoring confidence in the sustainability of Saudi Arabia’s economic trajectory.

Most Viewed

 
 
Business

Saudi Arabia Ranks First in GCC, 12th Globally in 2026 Marsh CFA Institute Global Pension Index

The Saudi flag. Asharq Al-Awsat
The Saudi flag. Asharq Al-Awsat
TT
TT

Saudi Arabia Ranks First in GCC, 12th Globally in 2026 Marsh CFA Institute Global Pension Index

The Saudi flag. Asharq Al-Awsat
The Saudi flag. Asharq Al-Awsat

The Kingdom of Saudi Arabia ranked first among GCC states and 12th globally out of 55 pension systems in the 2026 Marsh CFA Institute Global Pension Index. The Kingdom's overall score climbed to 73.2 out of 100, up from 67.6 in 2025, continuing an upward trajectory that has seen it advance 15 places since 2022.

The Kingdom achieved notable gains across the index's three primary pillars. In the Integrity sub-index—which evaluates regulatory governance, member communication, and participant rights—Saudi Arabia scored 83.5, up 9.3 points from the previous year, securing an A rating, the highest classification in the category.

The Kingdom's Sustainability score increased to 61.2 points from 54.6, while Adequacy rose to 77.2 from 75, maintaining an overall B grade, SPA reported.

With its 73.2 score, Saudi Arabia outperformed established international pension systems categorized within the B band, including the United Kingdom, Canada, France, Germany, Belgium, Ireland, and Hong Kong, while leading all participating Gulf nations.

The index noted that Saudi Arabia's advancement was driven by sustained governance reforms, regulatory enhancements, data modernization, and stronger safeguards for scheme beneficiaries.

These results reflect ongoing modernization within the national social insurance ecosystem led by the Social Insurance, aimed at expanding benefit adequacy and safeguarding long-term fiscal sustainability.

Published in collaboration with the Monash Centre for Financial Studies, the 18th edition of the Marsh CFA Institute Global Pension Index evaluates retirement systems covering two-thirds of the world's population across more than 50 sub-indicators.

Business

China’s January-September Fiscal Revenue up 5.1% y/y

People look at their phones in a touristic area in Beijing, China, 22 October 2026. (EPA)
People look at their phones in a touristic area in Beijing, China, 22 October 2026. (EPA)
TT
TT

China’s January-September Fiscal Revenue up 5.1% y/y

People look at their phones in a touristic area in Beijing, China, 22 October 2026. (EPA)
People look at their phones in a touristic area in Beijing, China, 22 October 2026. (EPA)

China's fiscal revenue increased 5.1% in the first nine months of 2026 from a year earlier, following a gain of 5.7% in the January-August period, the finance ministry said on Friday.

In the January-September period, fiscal revenue totaled 17.2 trillion yuan ($2.58 trillion), with tax revenue growing 6.1% year-on-year and non-tax ‌revenue expanding ‌1.2%.

Fiscal expenditure was up ‌1.0% ⁠on the year ⁠in the period, slowing from a rise of 1.2% in the first eight months.

China has accelerated local special bond issuance this year and plans to front-load part of its 2027 ⁠quota, finance ministry official Zhao Zeyong ‌told a press ‌conference on Friday.

Net special bond issuance ‌from January to September reached 3.56 trillion ‌yuan, accounting for 81% of the annual quota, and issuance for September was at 633.5 billion yuan, up by 214.8 billion yuan ‌from the same month last year, Zhao said.

Revenue from ⁠government ⁠land sales fell 27.9% on the year for the period from January to September, narrowing from a fall of 28.6% in the first eight months of this year.

The property sector downturn that began in mid-2021 has eroded land-sale revenue, long a crucial funding source for Chinese local governments.

Business

Asian Stocks Mixed Ahead of Weekend as Tech Recovers Early Losses

A person walks in front of an electronic stock board showing Japan's Nikkei index at a securities firm Thursday, Oct. 22, 2026, in Tokyo. (AP)
A person walks in front of an electronic stock board showing Japan's Nikkei index at a securities firm Thursday, Oct. 22, 2026, in Tokyo. (AP)
TT
TT

Asian Stocks Mixed Ahead of Weekend as Tech Recovers Early Losses

A person walks in front of an electronic stock board showing Japan's Nikkei index at a securities firm Thursday, Oct. 22, 2026, in Tokyo. (AP)
A person walks in front of an electronic stock board showing Japan's Nikkei index at a securities firm Thursday, Oct. 22, 2026, in Tokyo. (AP)

Asian equities were mixed Friday as tech firms managed to claw back some early losses on bargain-buying at the end of tough week for the sector, while traditional safe havens benefited from a generally cautious mood.

Since AI-linked companies hit record highs in June, their equity prices have been pummeled by concerns they were overvalued, their huge outlays on infrastructure and hardware might not return a profit and, more recently, their servicing costs were spiraling.

That has combined with an Iran war-fueled surge in oil prices to more than $100 that has ramped up inflation, forced central banks to hike interest rates and sent government borrowing costs to multi-decade highs.

Strong earnings in past quarters have been able to temper many of the concerns, but analysts pointed out that investors are demanding better and better results to justify their backing.

Earnings from Facebook-parent Meta and chip equipment maker Lam Research this week have beaten forecasts but seen their shares dive.

"Even positive news is being ignored," said FOREX.com's Fawad Razaqzada.

"Strong results are no longer enough if the outlook fails to match an already demanding valuation. Investors are becoming much less forgiving."

The rush out of tech has, however, boosted industrial companies overlooked for much of the AI boom, with the Dow rising this week while the Nasdaq and S&P 500 retreated.

The general losses in New York filtered through to Asia in the morning, but some markets staged a comeback as the day progressed.

Seoul -- which was at the forefront of the AI boom and has led recent losses -- shed more than two percent after the open but was up at the close.

Chipmaker and market heavyweight SK hynix -- a major target amid the waves of buying and selling -- ended up more than four percent. However, its US shares fell more than eight percent Thursday after it said it was scrapping plans for an initial public offering for its US subsidiary Solidigm, citing "market conditions and share price trends".

There were also gains in Hong Kong, Shanghai, Sydney, Singapore and Jakarta.

Tokyo's Nikkei 225, which is also heavily weighted to tech, ended in the red, though well off earlier lows. Wellington, Mumbai and Manila were also down. Taipei was closed as Typhoon Champi neared Taiwan.

London, Frankfurt and Paris dropped in the morning.

Safe havens benefited, with the yen rallying against the dollar, helped by strong Japanese inflation data that boosted bets on another interest rate hike.

The currency has struggled against the greenback in recent years owing to the wide interest rate gap between the United States and Japan, as well as worries about the Asian giant's fiscal situation.

US Treasuries were also in demand, with yields falling from two-decade highs.

"Markets are looking for safe havens as the now familiar fears over AI and the tech sector, alongside ever higher oil and energy prices are powering a move back into bonds," said National Australia Bank's Gavin Friend.

"Regardless of the continued climb in oil prices, investors are increasingly looking for safe havens with the recent pullback in US Treasury yields getting a sizeable push," he said, adding that two- and 10-year Treasury yields were at one-month lows.

And Carol Kong at Commonwealth Bank of Australia said the yen could benefit further if the tech trade continued to deteriorate.

Oil prices added to the dour mood on fresh Middle East worries. Brent extended Thursday's spike and headed back towards $115 a barrel for the first time since May, while WTI topped $100.

The latest rally came after Iran threatened to hit US bases in the region if its military continued to escort ships through the Strait of Hormuz.