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.

How should you choose a forecaster if some are too optimistic while others are too pessimistic? FocusEconomics collects Saudi Arabian investment projections for the next ten years from a panel of 8 analysts at the leading national, regional and global forecast institutions. These projections are then validated by our in-house team of economists and data analysts and averaged to provide one Consensus Forecast you can rely on for each indicator. By averaging all forecasts, upside and downside forecasting errors tend to cancel each other out, leading to the most reliable investment forecast available for Saudi Arabian investment.

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