Saudi Arabia's gross domestic product (GDP) grew 3.9% in the second quarter of 2025, driven by the non-oil sectors, according to government data estimates.

Non-oil activity increased by 4.6% compared to the same quarter last year, according to the General Authority for Statistics (GASTAT). Electricity, gas, and water showed the highest growth followed by finance, insurance, and business activities.

The economy expanded across all sectors with oil up 3.8% and government activities rising 0.6%. 

Oil activities showed the largest growth compared to the first quarter, soaring by 5.6%. Saudi and its OPEC allies raised oil production by 137,000 barrels per day (bpd), which should help boost the economy going forward. 

The first half of the year saw the kingdomís revenues at SAR 565.2 billion, compared to expenditure of SAR 658.45 billion, leading to a deficit of SAR 93.24 billion, according to data from the Ministry of Finance.

Overall revenues contracted 13% during the period compared to the first half of 2024. Oil contracted 24%, but was offset by growth in taxes on income, profit and capital gains, taxes on goods and services and non-oil revenues. Expenditures also declined 2% during the same period.

TRADE FLOWS REMAIN ROBUST

Meanwhile, trade is also on the up, despite global trade tensions. 

Second quarter data from GASTAT showed non-oil exports (including re-exports) continued to grow by 17.8% compared to the second quarter of 2024, while national non-oil exports increased by 5.6%, and the value of re-exported goods rose by 46.2%.

Merchandise exports fell 7.3% compared to the same period last year, due to a 15.8% decline in oil exports. Accordingly, the share of oil exports in total exports decreased from 74.7% in the second quarter of 2025 to 67.9% during the same quarter of 2024. 

Merchandise imports increased by 13.1% in Q2 2025 compared to the same period of the previous year, while the merchandise trade balance surplus decreased by 56.2%. The ratio of non-oil exports to imports rose to 37.3% versus 35.8% in the same quarter of 2024.

Chemical products were the top non-oil export items with 23% of the total, followed by machinery, electrical equipment, and parts with 21.7%. Machinery, electrical equipment, and parts were also the most imported goods, accounting for 28.9% of the total. 

China was the kingdomís main trading partner in Q2 2025, accounting for 14.2% of total exports and 27.4% of total imports. 

BUSINESS ACTIVITY EXPANDS

Saudi Arabiaís non-oil private sector continued to record strong momentum in August, according to the latest S&P Purchasing Managersí Index (PMI). Business activity expanded at a slightly faster pace in August compared to July, supported by a surge in new orders and a historically robust rise in employment. Stronger input buying during the month added to purchase price pressures, which fed through to higher selling charges. 

Output growth strengthened in August, marking a sharp overall increase, though only a modest improvement on Julyís 42-month low, the PMI report noted. Surveyed firms attributed the rebound to stronger economic conditions, rising sales, and stepped-up marketing activity. 

New order volumes also ticked higher, reflecting stronger client demand  at home and abroad. Firms pointed to renewed growth in export sales, with gains supported by marketing initiatives in overseas markets and closer collaborations with clients across the GCC. Domestic infrastructure projects also helped lift demand. In total, 28% of respondents reported growth in new orders versus 9% who noted declines, with the service sector posting the highest gains. 

Non-oil companies also ramped up their purchasing activity in August, with a faster pace of growth compared to the previous survey period. As a result, total inventories rose to their greatest extent in four months. Average lead times improved in August, but only at a modest pace that was much softer than May's recent high, according to the S&P report. 

STRONG LABOUR MARKET

Overall unemployment rate, including Saudis and non-Saudis, reached 2.8%, while the overall labour force participation rate reached 68.2%. The labour force participation rate for Saudis increased to 51.3%, compared to the fourth quarter of 2024, according to GASTAT.

Labour force participation among Saudi men, reached 66.4%, accompanied by a 4% decline in unemployment rate for this segment.

Unemployment among Saudi citizens fell to a record low of 6.3%, and was especially pronounced among Saudi women with jobless rate declining to 10.5%, more than 11 percentage points lower than in 2021. This underscores the growing role of women in the workforce and the success of supportive employment policies.

ìIt highlighted the success of womenís empowerment initiatives, which contributed to increased female economic participation and enhanced their role in driving growth and sustainable development,î the report noted. In addition, the labour force participation rate for Saudi females rose to 36.3%.