Saudi Arabia GDP Growth Softest in Almost Two Years

Saudi Arabia’s economy expanded 3.0% year-on-year in the first quarter of 2026, revised higher from a preliminary estimate of 2.8% but slowing from 5.0% growth in the previous period. This marks the softest economic expansion since the second quarter of 2024, as growth in oil activities slowed to 2.9% from 10.8% in Q4, pressured by ongoing US–Iran tensions that disrupted shipping through the Strait of Hormuz, a critical chokepoint for about 20% of global oil and LNG trade. Non-oil activities also rose at a softer pace of 2.9%, down from 4.6% in the prior quarter. Meanwhile, government activities rebounded by 1.5%, following a 1.2% contraction in the previous period. On a quarterly basis, the economy contracted by 1.2% in Q1, primarily due to a 6.8% decline in oil activities, which was partially offset by increases of 1.4% in government activities and 0.3% in non-oil activities.
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