Oil Sector Slump Pulls Saudi Arabia's Second-quarter GDP Down

MT Newswires · 2d ago
03:15 AM EDT, 07/30/2026 (MT Newswires) -- Saudi Arabia's economy contracted 4.8% year over year in the second quarter due to a steep drop in oil activities, flash data from the country's General Authority for Statistics showed Thursday. The contraction reversed the 3% real gross domestic product growth in the first quarter, driven by a 24.7% decline in oil-related operations, which offset modest annual gains of 0.9% in government services and 0.6% in non-oil sectors. By sector, oil activities knocked 5.4 percentage points off real GDP growth. In contrast, non-oil activities added 0.4 percentage points, while government activities and net taxes on products contributed 0.1 percentage points each. Meanwhile, the kingdom recorded a 4.9% quarter-on-quarter fall in seasonally adjusted real GDP for the second quarter, extending the 1.2% downturn in the previous three-month period. The quarterly decline reflected a 21.5% plunge in oil activities and a 0.5% dip in non-oil-related operations, counterbalanced by a minor 0.2% uptick in government activities. The oil industry dragged seasonally adjusted quarterly GDP growth down by 4.5 percentage points, alongside minor negative contributions from the non-oil sector and net product taxes, which eroded gains by 0.3 and 0.1 percentage points, respectively. On the flip side, government activities registered a slight positive contribution of 0.03 percentage points.