Saudi Arabia’s economy experienced a sharp slowdown in H1 2026, with real GDP growth declining from 3.0% in Q1 to -4.8% in Q2, primarily due to a 24.7% contraction in oil activity amid geopolitical and trade disruptions. However, the non-oil economy remained resilient, growing 0.6%, while inflation stayed contained at around 1.8%, and the non-oil private sector recovered, with PMI reaching 53.3 in June.
External trade provided an additional source of resilience, as exports increased by 9.1% YoY to SAR 513 billion during January–May 2026, while imports declined 4.6% to SAR 371 billion. This widened the trade surplus by approximately 75% to SAR 142 billion. Meanwhile, labor-market measures supported the employment of 329,000 Saudi nationals during H1 2026, up 23% year-on-year.
The report highlights the continued impact of regional geopolitical disruptions, particularly on oil exports, which fell sharply in May before recovering in June through alternative export routes. Looking ahead, Saudi Arabia’s economic outlook will depend on oil-market stability, continued non-oil growth, industrial diversification, investment, and Vision 2030 implementation, with major platforms such as LEAP 2026, the Saudi Industry Forum, and the Future Investment Initiative supporting investment and economic development.
