Saudi Arabia's Q2 GDP Declines 4.7% as Oil Activities Fall
A 24.8% drop in oil activities pulled Saudi Arabia's economy into a 4.7% contraction, while non-oil activity rose only 0.9%.
Saudi Arabia's real gross domestic product contracted 4.7% in the second quarter of 2026 from a year earlier, according to estimates from the General Authority for Statistics. The headline drop had one overwhelming cause: oil activities fell 24.8%. That slump alone reduced real GDP by 5.4 percentage points.
Other parts of the economy barely moved. Non-oil activities rose 0.9% year on year, adding 0.6 percentage point. Government activities also rose 0.9%, contributing 0.1 point, and net taxes on products added another 0.1 point. The combined support from those segments was far smaller than the damage done by oil.
The quarterly figures follow the same pattern. On a seasonally adjusted basis, real GDP fell 4.8% from the first quarter to the second. Oil activity dropped 21.6%, shaving 4.5 percentage points off growth. Non-oil activity fell 0.4%, a 0.2-point drag. Net taxes subtracted 0.1 point. Government activity rose 0.2%, adding only 0.03 point, not enough to move the total.
Within the non-oil economy, the gains were concentrated in services. Community, social and personal services grew 4.1% year on year and 0.6% quarter on quarter. Finance, insurance and business services rose 3.3% annually and 0.7% sequentially. Agriculture, forestry and fishing expanded 2.6% from a year earlier and 0.9% from the previous quarter. These are healthy numbers, but they sit on top of a relatively small share of output.
Expenditure data show why trade is dragging down the economy. Exports fell 24.6% year on year and 24.0% quarter on quarter. Imports declined 14.8% annually and 5.5% sequentially. Government final consumption rose 5.0% year on year, though it declined 2.0% quarter on quarter. Gross fixed capital formation increased 2.7% year on year, but decreased 1.4% quarter on quarter. Private final consumption grew 0.8% compared with the same quarter in 2025 and 1.0% on a seasonally adjusted quarterly basis.
The contraction carries an uncomfortable implication for Saudi policy. Oil exports are falling fast enough to reduce overall exports by nearly a quarter, a swing that creates immediate pressure on the budget and the external balance. Non-oil growth, at less than 1%, remains too slow to absorb that shock. The data suggest the economy is still tied to decisions about crude supply, and diversification has not yet changed that basic dynamic.
