ABU DHABI, April 30 - Saudi Arabia's economy recorded 2.8% year-on-year growth in real GDP during the first quarter, preliminary figures released by the General Authority of Statistics show. That pace marks a slowdown from the 3.7% expansion recorded in the same period a year earlier.
The data indicate that non-oil activities expanded 2.8% in the quarter, while oil activities increased 2.3% compared with the prior-year period. By contrast, non-oil activity growth in the corresponding quarter last year stood at 5.5%.
On a sequential basis, the economy contracted 1.5% in the three months to March 31 compared with the fourth quarter. The quarterly decline was largely driven by oil-sector weakness: oil activity fell 7.2% from the previous quarter, while non-oil activity was nearly flat over the same period.
The slowdown in growth is linked in the government statement to the broader economic fallout from clashes tied to the U.S.-Israeli strikes on Iran that began in late February and Tehran's subsequent retaliatory attacks on Gulf states. Those strikes have damaged major energy facilities and interrupted shipping through the Strait of Hormuz - a waterway that normally carries about 20% of global oil and liquefied natural gas flows - contributing to disruption across the region.
Analysts expect the conflict to weigh heavily on Gulf growth this year, with several regional economies projected to contract before recovering in 2027. The International Monetary Fund has said Saudi Arabia should be less severely affected than some neighbours because the kingdom can redirect some exports via alternative routes and its non-oil industrial output is relatively more resilient.
In light of recent developments, the IMF has lowered its growth projection for Saudi Arabia in 2026 to 3.1%, a revision that is 1.4 percentage points below the Fund's January projection. A Reuters analyst poll, cited alongside official commentary, forecasts 2026 GDP growth at 2.6%.
Prior to the regional hostilities, Saudi authorities had been increasing oil production in the second half of last year after easing voluntary output curbs that had been in place for several years to support the oil market. The new statistical release reflects how the disruption to energy infrastructure and shipping has begun to translate into measurable near-term weakness in oil activity and the aggregate economy.
Contextual note: The preliminary government figures outline the immediate impact on headline and sectoral growth rates but do not provide further detail on the composition of non-oil activity or the specific channels by which export redirections have mitigated the shock.