Market Update: We break down the business implications, market impact, and expert insights related to Market Update: Saudi Arabia’s economy grows 4.5pc in 2025 – Full Analysis.
Saudi Arabia’s real gross domestic product expanded by 4.5 per cent year on year in 2025, driven by strong growth in both oil and non-energy activities, official data showed.
According to flash estimates released by Saudi Arabia’s General Authority for Statistics (GASTAT), oil activities in the kingdom expanded by 5.6pc in 2025 compared to the previous year, while non-oil operations and government activities rose by 4.9pc and 0.9pc, respectively, during the same period.
The latest report aligns with an October outlook from the International Monetary Fund, which projected Saudi Arabia’s GDP would grow by 4pc in both 2025 and 2026.
Earlier this month, the World Bank forecast that the kingdom’s GDP is projected to expand by 4.3pc in 2026 and 4.4pc in 2027, up from an expected 3.8pc in 2025.
“The main driver of real GDP growth in 2025 was non-oil activities, which contributed 2.7 percentage points, while oil activities with 1.4 pp, government activities at 0.1 pp and net taxes on products at 0.2 pp, also contributed positively,” said GASTAT.
Momentum accelerated toward year-end. Real GDP expanded 4.9pc in the fourth quarter from a year earlier, led by a 10.4pc surge in oil activities, while non-oil sectors grew 4.1pc. Government activities contracted 1.2pc on an annual basis in the quarter.
“The main driver of growth in real GDP of the fourth quarter of 2025 was oil activities, which contributed 2.5 pp, non-oil activities contributed 2.3 pp and net taxes on products contributed 0.2 pp, while government activities had a negative contribution of 0.2 pp,” added the authority.
Saudi Arabia’s seasonally adjusted real GDP recorded growth of 1.1pc in the fourth quarter of 2025 compared to the previous three months.
In the fourth quarter, oil activities witnessed a quarter-on-quarter growth of 1.4pc, while non-oil activities expanded by 1.3pc during the same period.
Government activities, however, recorded a decline of 0.2pc in the fourth quarter compared to the previous three months.
Earlier this month, a separate analysis by Standard Chartered said the kingdom’s GDP is expected to expand by 4.5pc in 2026, outperforming the global growth average of 3.4pc, driven by sustained momentum in both hydrocarbon and non-oil sectors.