Saudi Arabia: Economic growth increases in the last quarter of 2025
Solid Q4 GDP growth: According to a preliminary reading, Saudi Arabia’s GDP increased 4.9% on a year-on-year basis in Q4, following a 4.8% expansion in the previous quarter.
In seasonally and calendar-adjusted quarter-on-quarter terms, the economy grew 1.1% in Q4, following a 1.4% increase in the previous quarter.
Oil sector drives economic growth: Compared to the prior quarter, the reading in Q4 improved for the oil sector (10.4% in year-on-year terms vs 8.3% in Q3). In contrast, readings in Q4 worsened for the private non-oil sector (4.1% vs 4.3% in Q3) and government non-oil activities (-1.2% vs 1.4% in Q3).
The oil sector contributed significantly to economic growth in Q4, following the easing of production restrictions that Saudi Arabia had previously imposed in coordination with its OPEC+ partners.
GDP growth to stabilize in 2026: Our panelists expect GDP growth in 2026 to be roughly the same as in 2025. OPEC+’s decision to extend the pause on planned oil ouput hikes through March 2026 is likely to be a key factor contributing to this slowdown. Still, the economy remains on a strong trajectory, with growth of non-oil GDP set to keep rising at an upbeat pace in 2026 as the government continues to diversify the economy away from oil.