Saudi Arabia’s Economy Grows 3% in First Quarter as Non-Oil Sector Drives Expansion

Saudi Arabia’s economy expanded by 3 percent in the first quarter of 2026 compared with the same period a year earlier, supported by growth across oil, non-oil and government activities, according to newly released official data.

The figures, published by the General Authority for Statistics, highlight the increasing role of non-oil sectors in supporting economic growth as the Kingdom continues efforts to diversify its economy under the Vision 2030 programme.

The report showed that both oil and non-oil activities grew by 2.9 percent year on year during the three months ending March 31, while government activities increased by 1.5 percent.

Non-oil activities made the largest contribution to overall growth, accounting for 1.7 percentage points of the total 3 percent expansion. Oil activities contributed 0.8 percentage points, while government activities added 0.3 percentage points. Net taxes on products accounted for a further 0.2 percentage points.

Despite the annual increase, the economy contracted by 1.2 percent on a seasonally adjusted basis compared with the fourth quarter of 2025. The decline was mainly driven by a 6.8 percent drop in oil activities during the quarter.

The statistical authority said gains in government activities, which rose 1.4 percent quarter on quarter, and non-oil activities, which increased 0.3 percent, partially offset the decline in the oil sector.

The latest figures broadly align with forecasts from the Organisation for Economic Co-operation and Development, which expects Saudi Arabia’s economy to grow by 3.2 percent in 2026 and accelerate to 4.3 percent in 2027.

Earlier this month, the International Monetary Fund projected that the Kingdom’s economy would expand by around 2 percent this year, assuming shipping activity through the Strait of Hormuz returns to normal amid ongoing regional tensions. The IMF said Saudi Arabia remains resilient due to strong economic fundamentals, low public debt levels, substantial foreign reserves and support from its sovereign wealth fund.

Among individual sectors, finance, insurance and business services recorded the strongest annual growth at 5.4 percent. Manufacturing activities excluding petroleum refining increased by 4 percent, while crude petroleum and natural gas activities rose 3.6 percent.

Transport, storage and communication activities expanded 3.3 percent, and other mining and quarrying activities grew 3 percent.

On the expenditure side, government final consumption expenditure increased by 11.3 percent year on year, while private consumption rose 5.3 percent. Gross fixed capital formation, a key indicator of investment, climbed 3.9 percent from a year earlier and advanced 7.5 percent compared with the previous quarter.

The data suggest that investment and consumer spending continued to support economic activity, while non-oil sectors remained a key driver of growth during the opening months of 2026.