FX.co ★ Saudi Arabia GDP Growth Softest in Almost Two Years

Saudi Arabia’s economy grew 3.0% year-on-year in the first quarter of 2026, revised up from a preliminary estimate of 2.8% but down from 5.0% in the previous quarter. This was the weakest expansion since the second quarter of 2024.

The slowdown was driven largely by a moderation in oil activity, with growth easing to 2.9% from 10.8% in Q4. The sector was pressured by ongoing US–Iran tensions, which disrupted shipping through the Strait of Hormuz, a key chokepoint for roughly 20% of global oil and LNG trade. Non-oil activities also lost momentum, expanding 2.9% compared with 4.6% in the prior quarter.

By contrast, government activities returned to growth, rising 1.5% after a 1.2% contraction in the previous period.

On a quarterly basis, GDP fell 1.2% in Q1, mainly reflecting a 6.8% decline in oil activities. This was partially offset by increases of 1.4% in government activities and 0.3% in non-oil activities.