Saudi Arabia Q3 GDP Shrinks for 2nd Quarter

Saudi Arabia’s economy shrank 3.8% year-on-year in the third quarter of 2026, after contracting 4.7% in the previous quarter, preliminary estimates showed. It was the second straight quarter of economic contraction, as oil activities slumped 20.4%, following a 24.8% plunge in Q2, due to the ongoing Middle East conflict that disrupted shipping through the Strait of Hormuz. The contraction was also accompanied by a 2.7% decline in government activities, after rising by 0.9% in Q2. However, the economic contraction was partly offset by faster growth in non-oil activities, which rose 1.9%, compared with 0.8% in Q2. On a quarterly basis, the economy expanded by 1.3% in Q3, recovering from a 4.8% contraction in Q2, driven by rebounds in oil activities (5.7% vs -21.6% in Q2) and non-oil activities (0.6% vs -0.4%), while government activities fell by 1.2%, compared with a 0.2% increase in Q2.

Saudi Arabia’s economy contracted 4.7% year-on-year in the second quarter of 2026, revised slightly higher from a preliminary estimate of a 4.8% decline, and reversing from a 3.0% expansion in the previous period. This marked the first decline since the fourth quarter of 2023, as oil activities plunged 24.8%, reversing from 2.9% growth in Q1, pressured by ongoing US-Iran tensions that disrupted shipping through the Strait of Hormuz, a key chokepoint for global oil and LNG trade. Non-oil activities also grew at a slower pace of 0.9%, down sharply from 2.8% in the prior quarter. At the same time, government activities moderated to 0.9%, following a 1.5% advance in the previous period. On a quarterly basis, the economy contracted by 4.8% in Q2, primarily due to a 21.6% decline in oil activities and a 0.4% drop in non-oil activities, which largely offset a 0.2% increase in government activities.

Saudi Arabia’s economy contracted 4.8% year-on-year in the second quarter of 2026, reversing the 3.0% expansion in the previous quarter, preliminary data showed. This marked the first decline since the fourth quarter of 2023, weighed down by a sharp contraction in oil activities, which fell 24.7% year-on-year and subtracted 5.4 percentage points from overall GDP growth. Meanwhile, non-oil activities and government activities continued to expand, though at slower rates, with non-oil activity growth easing to 0.6% from 2.9% in Q1 and government activity growth slowing to 0.9% from 1.5%. On a seasonally adjusted quarterly basis, GDP declined 4.9%, following a 1.2% contraction in the previous quarter, as oil activities dropped 21.5% and non-oil activities decreased 0.5%, while government activities increased 0.2%.