The Kingdom of Saudi Arabia’s flag
Riyad Capital expects Saudi Arabia’s economy to accelerate in 2025–2026, driven by strong non-oil growth, with real GDP forecast to rise 4.6% in 2025 and 4.3% in 2026, following 5.2% growth in 2024, marking six consecutive years of expansion above 4%. 
Inflation is expected to remain low, averaging 2.3% in 2025 and 2.2% in 2026, while the US Federal Reserve is projected to cut rates by 100 basis points through end-2026, with the Saudi Central Bank likely keeping repo and reverse repo rates unchanged.
Saudi crude output is forecast to return to pre-COVID levels by September 2025, supporting oil-sector growth of 5.3% in 2025 and 5.4% in 2026. This assumes OPEC+ proceeds with its plan to unwind voluntary cuts in Q3 2025 and revises oil growth estimates upward.
Overall GDP growth is forecast at 4.3% in 2025, up from 2% last year, and is expected to hold at 4.3% in 2026, while the current account surplus is projected to narrow to 3.7% of GDP in 2025 from 5.0% a year earlier, before slipping further to 3.3% in 2026 on higher oil imports and stronger tourism receipts.
The government is expected to pursue a more cautious fiscal policy, with public spending projected to grow 4% in 2025 and 3% in 2026, while the fiscal deficit is forecast at –3.4% of GDP in 2025, narrowing slightly to –3.0% in 2026.
Unemployment is likely to decline to 7.5% in 2025 and 7.0% in 2026, about 100 basis points below current levels.
The Kingdom of Saudi Arabia’s flag
Riyad Capital expects Saudi Arabia’s economy to accelerate in 2025–2026, driven by strong non-oil growth, with real GDP forecast to rise 4.6% in 2025 and 4.3% in 2026, following 5.2% growth in 2024, marking six consecutive years of expansion above 4%.
Inflation is expected to remain low, averaging 2.3% in 2025 and 2.2% in 2026, while the US Federal Reserve is projected to cut rates by 100 basis points through end-2026, with the Saudi Central Bank likely keeping repo and reverse repo rates unchanged.
Saudi crude output is forecast to return to pre-COVID levels by September 2025, supporting oil-sector growth of 5.3% in 2025 and 5.4% in 2026. This assumes OPEC+ proceeds with its plan to unwind voluntary cuts in Q3 2025 and revises oil growth estimates upward.
Overall GDP growth is forecast at 4.3% in 2025, up from 2% last year, and is expected to hold at 4.3% in 2026, while the current account surplus is projected to narrow to 3.7% of GDP in 2025 from 5.0% a year earlier, before slipping further to 3.3% in 2026 on higher oil imports and stronger tourism receipts.
The government is expected to pursue a more cautious fiscal policy, with public spending projected to grow 4% in 2025 and 3% in 2026, while the fiscal deficit is forecast at –3.4% of GDP in 2025, narrowing slightly to –3.0% in 2026.
Unemployment is likely to decline to 7.5% in 2025 and 7.0% in 2026, about 100 basis points below current levels.
