Saudi Arabia’s nominal GDP rose 6.3% year-on-year to SR1.274 trillion in Q1 2026, driven primarily by a 12.3% increase in oil activities, stated the Gulf major’s Ministry of Investment’s May 2026 Monthly Bulletin.
As per the report, during the quarter, the Kingdom’s economic growth, with real GDP, expanded 3% on a year-on-year basis. Gross Fixed Capital Formation (GFCF), a key measure of investment, increased 5.1% during the same period after contracting through much of 2025.
As per the Saudi Ministry of Interior’s figure, total GFCF reached SR358.3 billion, with the non-government sector accounting for SR319.9 billion, or 89% of total investment. Government investment recorded strong growth, with GFCF on the particular front surging 54% to SR38.3 billion during the quarter.
Inflationary conditions have remained stable, with the Consumer Price Index (CPI) remaining at 1.7% in April 2026. This was mostly due to a 3.8% increase in housing, water, electricity, gas, and other fuels, as well as a 1% rise in both transportation and restaurant and accommodation services. Consumer activity remained resilient, with point-of-sale (POS) transactions rising 11.8% year-on-year in April, indicating continued strength in household spending.
Meanwhile, average Brent crude prices climbed 54.2% year-on-year to USD 102.5 per barrel in April, providing support to oil-sector revenues and economic activity. Labour market indicators also improved, with Saudi unemployment falling to 7.2% in the fourth quarter of 2025, down from 7.5% in the previous quarter.
The SME sector (small and medium enterprises) too witnessed continued growth in financing that accounted for 11.5% of the total credit facilities. Credit facilities extended to the sector reached a record SR468 billion in Q4 2025, up 33% year-on-year.
“Foreign investor participation in Saudi capital markets remained strong, with foreign holdings reaching SR458 billion in May 2026,” the bulletin noted.
Despite the positive indicators, there were several areas of moderation. The Purchasing Managers’ Index (PMI) for the non-oil private sector declined 5.4% year-on-year to 52.8 points in May. However, the reading remained above the 50-point threshold that generally signals expansion.
Talking about the bigger picture, the Kingdom’s real GDP reached USD 1.31 trillion in 2025, with non-oil activities accounting for 55% of the economy, stated the National Transformation Programme 2025 Annual Report, which reviewed progress across economic development, investment, tourism, digital transformation, environmental sustainability and quality of life indicators as the Gulf major moves towards its “Vision 2030” diversification targets.
“Foreign direct investment inflows rose to USD 35.5 billion in 2025, nearly five times the level recorded in 2017, while non-oil GDP expanded by 4.9% during the year. More than 700 international companies have established regional headquarters in Saudi Arabia,” the report remarked.
While 93% of key performance indicators met or exceeded their annual targets, some 90% of initiatives were either completed or progressing as planned.
“Since the launch of Vision 2030, 935 initiatives have been completed, 225 remain on track, and more than 2,200 reforms and measures have been introduced,” the report noted.