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.
