Fitch Solutions’ research unit BMI revised its 2026 growth forecast for Saudi Arabia upward to 4.8%, 0.7 percentage points up from its October projection, signaling the Kingdom’s strongest economic performance in four years, MENA Country Risk Senior Analyst Mariette Kas-Hanna said in a webinar attended by EnterpriseAM. The upgrade follows an estimated 4.5% expansion in 2025.

BMI’s outlook remains more bullish than other forecasts, with the IMF recently upgrading the Kingdom’s growth forecast to 4.5% in 2026 and the World Bank expecting growth to be slightly lower at 4.3% in 2026. Meanwhile, the Finance Ministry anticipates GDP growth to reach 4.6% this year.

The drivers

The significant ramp-up in hydrocarbons is expected to accelerate growth, with oil production seen rising by 8.2% as Opec+ continues to phase out production curbs. This higher oil production, combined with robust growth in non-oil exports and re-exports, will significantly increase the net export contribution to GDP.

Fresh investments are on the way: “The Public Investment Fund’s (PIF) new five-year plan will inject fresh momentum to investment activity,” Hanna said, adding that cheaper funding due to lower interest rates will also encourage corporates to lift capex.

Private consumption remains a key stabilizer, supported by an expanding population and strategic government interventions — such as the Riyadh rent freeze — to keep a lid on inflation. However, Hanna notes that the rapid labor force expansion seen since 2018 may have peaked, “which will limit the upside for domestic demand.”

The GCC at large

The GCC is shaking off its sluggishness to enter a high-growth cycle, with its aggregate real GDP forecast to hit 4.8% in 2026, up from a projected 4.2% in 2025, as the region moves past Opec+ production curbs and doubles down on diversification.

As for inflation and monetary policy: Inflation is projected at a negligible 1.7% for the region, up from an anticipated 1.2% in 2025, driven by price pressures in non-oil commodities. GCC central banks are expected to follow the US Federal Reserve with 50 bps rate cuts in 2026, with Kuwait being the exception due to its peg to a distinct currency basket.

Downside risks: The GCC’s ability to export oil would be severely undermined should regional tensions disrupt shipping routes, potentially offsetting any gains from higher oil prices. A sharper-than-expected drop in oil prices — below BMI’s baseline of USD 67 / bbl — or a worsening global macro environment could also temper the current growth trajectory.

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