Economic growth in the Kingdom of Saudi Arabia is projected to continue recovering after declining to 1.3% in 2023, rising to 2.8% in 2025 and an average of 4.6% in 2026-2027. The phasing out of OPEC+ voluntary production cuts is expected to take hydrocarbon GDP growth to 6.7% in 2026 and 6.1% in 2027. Meanwhile, non-oil GDP is expected to continue rising steadily, by 3.6% on average between 2025 and 2027, as Saudi Arabia pursues its economic diversification agenda under Vision 2030.
The country’s real GDP expanded by 3.9 percent in the first half of 2025 compared to the same period in 2024, with non-oil activities growing by 4.8 percent and leading the recovery. Services have been the main driver, particularly wholesale and retail trade, restaurants, and hotels (+8.4 percent), while government services also expanded. The oil sector, after contracting in early 2025, returned to growth (+3.8 percent in Q2) as OPEC+ production cuts were phased out at an accelerated pace. Labor market conditions have strengthened: unemployment fell to 2.8 percent in Q1-2025 (from 3.5 percent in 2024), supported by rising female participation and lower joblessness among youth.
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