GDP grows 3.9% y-o-y in 2Q, buoyed by the non-oil sector.

The Kingdom’s real GDP grew 3.9% y-o-y in 2Q 2025, matching flash estimates made by the General Authority for Statistics (Gastat) in August, according to fresh data (pdf) from the authority. On a quarterly basis, growth came in at 1.7%, down from a preliminary estimate of 2.1%.

Non-oil activity continued to drive expansion: Non-oil activities grew 4.6% y-o-y, contributing the bulk (2.6 percentage points) of the Kingdom’s headline expansion, while seeing a modest 0.8% increase q-o-q. Oil activities grew 3.8% y-o-y, contributing 0.9 percentage points to overall growth. On a quarterly basis, the sector rose 5.6%, the fastest among all major activities.

Standout sectors: Electricity, gas, and water activities logged the highest growth at 10.3% y-o-y, followed by finance, ins., and business services (up 7.0%), and wholesale and retail trade, restaurants, and hotels (up 6.6%).

Meanwhile, government activities increased 0.6% y-o-y, despite being down 0.8% q-o-q.

Mixed picture in expenditure: Private final consumption grew by 4.1% y-o-y. However, investment saw a downturn, with gross fixed capital formation decreasing by 0.8% y-o-y. Government spending also declined by 2.5% compared to the same period last year.

Varied outlooks: The IMF has recently raised its forecast for Saudi Arabia’s 2025 GDP growth to 3.6%, up 0.6 percentage points from its April outlook. It has also upgraded its 2026 forecast by 0.2 percentage points to 3.9%. A recent Reuters poll anticipates Saudi Arabia to record 3.8% growth this year. Meanwhile, the World Bank maintained its June estimates of 2.8% growth for 2025 and 4.5% for 2026.

REMEMBER- Gastat has recently updated its nominal and real GDP historical data over 2011-2024 as part of a revision project that looks to better capture economic transformation with more detailed insights into the performance of key sectors in the economy. GDP growth during 1Q 2025 was revised upwards to 3.4% y-o-y from the 2.7% reading reported back in May.