Saudi Arabia's real gross domestic product (GDP) contracted by 4.7% year-on-year in the second quarter of 2026, according to flash estimates released by the General Authority for Statistics (GASTAT). The downturn was primarily driven by a significant 24.8% decline in oil activities, reflecting production cuts and lower sector output, while non-oil activities and government services both recorded modest growth of 0.9%. GASTAT highlighted that it has adopted the chain-linking methodology for national accounts calculations, moving away from the fixed base year approach. This dynamic statistical method uses the previous year's weights and prices to measure real GDP growth more accurately, providing a updated reflection of structural shifts across economic sectors. Despite the overall headline drop caused by reduced crude production, the continued positive trajectory of non-oil activities aligns with Saudi Arabia's Vision 2030 goals. Investors will be keeping a close eye on non-oil growth performance in upcoming quarters to gauge the resilience of the Kingdom's economic diversification strategy.
