Saudi Arabia: GDP soars in the third quarter
Strong GDP print meets expectations: According to a preliminary reading, Saudi Arabia’s GDP rose 5.0% on an annual basis in Q3, following a 3.9% rise in the previous quarter. The Q3 print matched our Consensus Forecast, and was the strongest since Q1 2023.
In seasonally and calendar-adjusted quarter-on-quarter terms, the economy grew 1.4% in Q3, following a 1.7% increase in the previous quarter.
Oil sector drives economic growth: Compared to the prior quarter, readings in Q3 improved for the oil sector (8.2% in year-on-year terms vs 3.8% in Q2) and government non-oil activities (1.8% vs 0.6% in Q2). In contrast, the reading for the private non-oil sector slightly worsened (4.5% vs 4.6% in Q2).
The oil sector improved as OPEC+ loosened output curbs, while the non-oil sector maintained strong momentum as the government diversifies the economy away from petroleum production.
GDP growth to peak in Q4: Our panelists expect GDP growth to rise further to a three-year high in Q4 as OPEC+ continues to unwind output curbs. Economic growth should then gently trend down in 2026; OPEC+ is set to pause output hikes in Q1, and a higher year-on-year base of comparison—the cartel began raising production in April this year—will further depress GDP growth.
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.