Saudi Arabia's economy remained strong during the first half of 2026, supported by rising trade flows, improving labour market conditions, stable business confidence, and solid sovereign credit fundamentals, despite commodity volatility and geopolitical tensions. 

Real GDP grew 3% in the first quarter of 2026 compared with the same period of 2025, according to the General Authority for Statistics (GASTAT). The expansion was broad based with oil and non-oil activities rising 2.9% each, and government activity accelerating 1.5%. Compared with the fourth quarter of 2025, seasonally adjusted real GDP declined by 1.2%.

Another strong signal came from foreign trade. According to GASTAT, Saudi Arabia recorded a trade surplus of ⃁ 90.5 billion in the first quarter of 2026, an increase of 43.7% compared with the same period a year earlier, and 60% higher than the previous quarter. Total merchandise trade reached more than ⃁ 535 billion, representing annual growth of 4.5%, with exports of ⃁ 312.8 billion exceeding imports of ⃁ 222.3 billion.

Exports, including oil and non-oil products, totalled ⃁ 274.5 billion, while re-exports rose 32.9% year on year to more than ⃁ 38 billion.  

The continued expansion of re-export activity reflects Saudi Arabia's growing role as a regional logistics and distribution hub, supported by investments in ports, airports and customs infrastructure.

Asia remained Saudi Arabia's largest export destination, accounting for more than ⃁ 229 billion in exports during the quarter, followed by Europe and Africa. China retained its position as the kingdom's largest individual trading partner. Non-oil exports and re-exports, valued at more than ⃁ 86 billion, passed through 32 land, sea, and air customs ports, with King Abdulaziz International Airport in Jeddah and Jeddah Islamic Port handling the largest volumes.

STABLE OUTLOOK

Saudi Arabia also received another vote of confidence from international credit markets during the period. Fitch Ratings armed the kingdom's 'A+' sovereign credit rating with a stable outlook, citing strong fiscal buers, substantial sovereign assets and a comparatively low public debt burden relative to similarly rated economies. While the agency noted that dependence on oil revenues remains a structural constraint, it said Saudi Arabia's fiscal and external balance sheets remain among the strongest in its rating category.

The agency concluded that the kingdom's economy and public finances remained resilient despite regional tensions and temporary disruptions to shipping. Oil exports continued through the East-West pipeline, while domestic demand helped cushion the impact of weaker petrochemical exports during the period.

Looking ahead, Fitch expects real GDP growth to slow to 0.6% in 2026, before edging much higher to 2.9% by 2028. 

The agency also highlighted the continued contribution of Vision 2030 projects, Public Investment Fund (PIF) investments and major infrastructure developments in supporting medium-term growth.

WOMEN UNEMPLOYMENT RATE SHRINKS

Labour market indicators also improved during the first quarter of 2026. The overall unemployment rate fell to 3.1%, down from the previous quarter, while unemployment among Saudi nationals declined to 6.4%, according to GASTAT.

Employment conditions strengthened across several demographic groups. The unemployment rate among Saudi women declined to 9% while the rate for Saudi men fell to 4.9%. Youth employment also improved, with unemployment among Saudi women aged 15-24 decreasing to 20.4% and among young Saudi men falling to 13.8%. Although labour force participation eased slightly during the quarter, the overall data suggest continued progress in integrating more Saudi nationals into the workforce as economic diversification creates new employment opportunities.

Business sentiment remained positive throughout June, suggesting private sector activity continues to expand despite a more uncertain global environment. GASTAT’s Business Confidence Index (BCI) increased to 56.6 points, up from 55.6 in May, indicating broad optimism across the economy.

The construction sector recorded the strongest reading at 57.8, reflecting continued activity across infrastructure, housing, and large-scale development projects. The services sector followed with a reading of 55.5, while the industrial sector reached 55.0, supported by improving expectations for sales, new orders and overall business performance. 

Together, these indicators reflect an economy that has remained resilient despite a more challenging external backdrop. Strong trade performance – particularly in non-oil exports and re-exports, continued investment in logistics infrastructure, and improving labour market outcomes have helped reinforce the kingdom's broader diversification strategy.

Saudi Arabia continues to benefit from substantial fiscal buers, a strong sovereign balance sheet and an active pipeline of public and private investment. As strategic projects advance and non-oil sectors expand, the kingdom appears well positioned to sustain economic transformation while strengthening its role as a regional centre for trade, investment, and logistics.