Saudi Arabia's economy contracts 4.8 percent in Q2 2026 amid sharp decline in oil activity

Fluctuations in the oil market continue to have a significant impact on Saudi Arabia's economy despite the country's efforts to develop non-oil sectors. The latest figures highlight the continued importance of the oil industry to overall economic performance.

According to preliminary estimates released Thursday by Saudi Arabia's General Authority for Statistics, the country's real gross domestic product contracted by 4.8 percent year on year in the second quarter of 2026. The decline largely offset the 3.0 percent growth recorded in the first quarter.

The contraction was mainly driven by a 24.7 percent year-on-year decline in oil-related activity, which reduced overall real GDP growth by 5.4 percentage points.

At the same time, non-oil activities grew by 0.6 percent, making a positive contribution of 0.4 percentage points to real GDP. Government activities and net taxes on products each contributed 0.1 percentage point.

On a seasonally adjusted basis, real GDP declined by 4.9 percent compared with the previous quarter. Oil activities fell by 21.5 percent, while non-oil activities declined by 0.5 percent. Government activities, meanwhile, increased by 0.2 percent. Saudi Arabia has been seeking to reduce its economic dependence on oil by developing manufacturing, services, tourism, infrastructure and other non-oil sectors. However, the latest figures show that oil activity continues to have a major influence on the country's overall economic performance.

The General Authority for Statistics noted that the figures are preliminary and based on incomplete quarterly data. The estimates may therefore be revised once additional information becomes available.

As reported by CCTV+, Saudi Arabia's economic contraction in the second quarter was primarily driven by a sharp decline in oil activity, while non-oil sectors continued to make a positive contribution.