Saudi Arabia’s economy maintained positive growth despite regional tensions and oil market volatility, reflecting strong fundamentals and the continued impact of diversification efforts. Expansion in non-oil activities remained the key driver, supporting stability and strengthening the economy’s ability to adapt to global shifts.
The General Authority for Statistics said in flash estimates that real GDP grew 2.8% in the first quarter of 2026 from a year earlier, with non-oil sectors contributing about 60% of the increase.
All major sectors posted gains. Non-oil activities rose 2.8%, the oil sector grew about 2.3%, and government activities increased 1.5% year on year.
Growth momentum
Economists told Asharq Al-Awsat the first-quarter expansion highlights the Kingdom’s structural shift, with oil no longer the main engine of growth. Non-oil sectors now lead, accounting for roughly 60% of the expansion.
They said the figures show diversification policies are delivering tangible results, strengthening economic stability and improving resilience to global and regional volatility. Sustained momentum, they added, reflects successful policies to build a broader, more durable production base and support long-term growth.
Mega projects
Naif Al-Ghaith, chief economist at Riyad Bank, said the economy is moving toward a more diversified and sustainable model, with growth set to accelerate as reforms continue and mega projects expand.
“All indicators point to a positive outlook in the medium and long term. Despite geopolitical events, the consumer confidence index in March showed an expansionary trend, as did the Riyad Bank Purchasing Managers' Index in April, along with private sector optimism, signaling a faster recovery in growth momentum in the coming quarters,” he said.
Al-Ghaith said the data confirm strong progress in diversification driven by non-oil growth, adding that the economy is building solid foundations away from oil volatility. He said government policies have opened new investment opportunities in sectors including tourism, entertainment, technology, energy and infrastructure.
He added that the state continues to invest billions in mega projects to generate future revenues, alongside efforts by the Public Investment Fund to accelerate diversification through targeted local and international investments.
Geopolitical challenges
Hisham Abu Jameh, senior adviser at Naif Al Rajhi Investment, said the first-quarter performance reflects a balance between growth and the ability to absorb temporary external pressures, with GDP maintaining a positive pace despite geopolitical risks and energy market swings.
He said the economy is no longer heavily reliant on oil and is better positioned to absorb shocks thanks to more diverse income sources.
Abu Jameh said the non-oil sector remains a key stabilizer. Despite slower growth than in previous periods, it continues to expand, supported by sectors such as tourism, services and logistics.
He said this reflects the success of reforms under Saudi Vision 2030 and of ongoing efforts to boost investment and private-sector participation.
Sector contributions
Data from the General Authority for Statistics showed non-oil sectors led growth, contributing 1.7 percentage points, followed by oil at 0.7 percentage points and government activities at 0.3 percentage points. Net taxes on products added 0.2 percentage points.
Seasonally adjusted data showed GDP fell 1.5% in the first quarter from the fourth quarter of 2025, driven by a 7.2% drop in oil activities. Non-oil sectors grew 0.8%, while government activities rose 0.2%.
On a seasonally adjusted basis, oil activities were the main drag, cutting 1.7 percentage points from growth. Non-oil and government activities each added 0.1 percentage points.
