The World Bank revised down its projection for Saudi Arabia’s GDP growth in 2026, saying in its Global Economic Prospects report (pdf) that it now sees the economy expanding 4.3% this year. That’s a slight revision of 0.2% from the bank’s previous forecast in June.

Remember the non-oil escape velocity: Most analysts agree that growth will be driven by the non-oil sector, fueled by high private consumption, a large youth demographic, and low unemployment. Conversely, the oil sector is expected to remain stagnant in early 2026 due to ongoing OPEC+ production caps.

The GCC at large

The GCC is poised to grow at a clip of 4.4% in 2026 and 4.6% in 2027 — well above projected global growth rates of 2.6% in 2026 and 2.7% in 2027. This acceleration is underpinned by a “steady expansion of non-hydrocarbon activity” and a strategic pivot as Opec+ begins to reverse production cuts.

The hydrocarbon rebound: After a larger-than-expected production increase in 2025, further Opec+ increases and expanding natural gas production — particularly in Qatar — will support the growth trajectory, according to the report.

Non-oil dynamism: Non-hydrocarbon activities now account for over 60% of total GCC GDP. This sector is being shored up by “expected large-scale investments” in infrastructure and technology, particularly in Kuwait and Saudi Arabia.

Fiscal deficits are expected to shrink across the GCC in 2026-27, courtesy of a boost to oil revenues — despite lower oil prices — as well as tax reforms, including in the UAE, the World Bank said.

Risks for the region are “tilted to the downside,” however, the World Bank says, pointing to regional conflicts, trade uncertainty, and lower oil prices as potentially harmful for demand, business confidence, and capital spending. Meanwhile, upside risks include further investments in AI and additional structural reforms across MENA.

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