Saudi Arabia’s non-oil activities expand in Q2

By the Editorial Team · Wednesday, September 9, 2026

Saudi Arabia's non-oil sector grew by 0.9 percent in Q2 2026 despite an overall GDP decline of 4.7 percent driven by a sharp 24.8 percent drop in oil activities. This mixed economic performance highlights the Kingdom's progress in diversifying its economy under Vision 2030, with projections indicating a stronger recovery in 2027 fueled by non-oil growth and domestic demand.

Saudi Arabia’s non-oil sector experienced modest growth in the second quarter of 2026, expanding 0.9 percent year on year, according to data released by the General Authority for Statistics (GASTAT). This increase occurred amid a broader contraction in the Kingdom’s overall economy, which saw real gross domestic product (GDP) decline by 4.7 percent compared to the same period last year.

The statistics highlight a continued divergence between the oil and non-oil sectors. Oil activities fell sharply by 24.8 percent year on year, exerting considerable pressure on the overall economic performance. GASTAT noted that oil production contributed negatively to real GDP by 5.4 percentage points during the quarter. In contrast, non-oil sectors contributed positively, adding 0.6 percentage points to GDP growth. Government activities and net taxes on products each added 0.1 percentage points.

On a seasonally adjusted basis, real GDP decreased 4.8 percent from the first quarter of 2026. Within this period, oil activities contracted by 21.6 percent, while non-oil activities declined slightly by 0.4 percent. Government activity, however, increased by 0.2 percent quarter on quarter. GASTAT identified the downturn in oil activity as the main driver behind the quarter’s GDP decline, with a negative contribution of 4.5 percentage points.

The non-oil segment showed varied performance across industries. Community, social, and personal services recorded the highest annual growth at 4.1 percent and grew 0.6 percent compared to the previous quarter. Finance, insurance, and business services expanded by 3.3 percent year on year and 0.7 percent quarter on quarter. Agricultural activities, encompassing forestry and fishing, increased by 2.6 percent over the same period, while real estate grew 1.6 percent.

Other sectors within the non-oil economy exhibited more moderate gains. Manufacturing excluding petroleum refining advanced by 0.9 percent annually, with construction up 0.7 percent and transport, storage, and communication rising 0.9 percent.

These developments underscore Saudi Arabia’s ongoing efforts to diversify its economy and reduce reliance on oil revenues, consistent with the government’s Vision 2030 objectives. Supporting this outlook, the Organisation for Economic Co-operation and Development projected that the Kingdom’s economy will regain momentum in 2027, with growth expected to accelerate to 4.3 percent following an estimated 3.2 percent expansion in 2026, driven largely by non-oil sector resilience and strong domestic demand.

This article was reported by synthesizing coverage from multiple independent news outlets to present a balanced, unbiased account. Read about our editorial standards. Spotted an error? Let us know.