Saudi economy swells 5% in third quarter

Saudi Arabia’s economy grew 5% in the third quarter of the year, due to all-round growth in oil and non-oil activities. 

Oil activities were the main driver powering the kingdom seasonally adjusted real gross domestic product (GDP) through the July-September period, growing 8.2% year-on-year, according to flash estimates issued by Saudi Arabia’s General Authority for Statistics (GASTAT). Seasonally adjusted real GDP grew 1.4% quarter-on-quarter. 

However, non-oil activities drove real GDP growth, rising 4.5%, and contributing 2.6 percentage points. This was accompanied by a 1.8% rise in government activities. 

The kingdom’s economy is expected to expand 4% this and next year, the International Monetary Fund said in its October regional economic outlook. Last month’s projections represent a 1.0 and 0.3 percentage point upward revision from April for 2025 and 2026, respectively. 

The fund also raised its growth projections for the MENA region in October, expected to grow 3.3% in 2025 against its April forecast of 2.6%. The region’s GDP will expand 3.7% next year, opposed to 3.4% estimated in April’s regional economic outlook.  

Saudi Arabia is expected to record $44.2 billion in fiscal deficit for next year, estimated at 3.3% of the kingdom’s GDP.

The kingdom has been running on budget deficits since 2022, as reduced oil prices compress revenues. Brent crude, which serves as a benchmark for roughly two-third of the world’s crude oil supplies, dipped 15% since the beginning of the year. 

The fund did not publish breakeven oil prices in its October regional outlook but said in April that the kingdom needs oil north of $92 per barrel to balance its books. 

Fitch Ratings reaffirmed Saudi Arabia’s credit rating at ‘A+’, with a stable outlook in August.