A recent economic report issued by Al-Ahli Capital revealed strong positive expectations for the future of the Saudi economy, predicting that it will achieve growth of 4.7% during 2026. These optimistic expectations are driven by a remarkable recovery in the oil sector, whose GDP is expected to grow by 8% on an annual basis, in conjunction with the continued momentum in non-oil sectors with a growth rate of up to 4%, reflecting the success of economic diversification policies.
Economic transformation and Vision 2030
To understand the significance of these figures, they must be viewed within the context of the radical transformations the Kingdom has undergone since the launch of Vision 2030. After decades of total dependence on oil, the Kingdom has succeeded in recent years in creating a diversified economic base. The projected growth of the non-oil sector is tangible evidence of the effectiveness of structural reforms, the improved business environment, and the empowerment of the private sector as a key partner in development, which is gradually reducing the economy's vulnerability to the volatility of global energy markets.
Mega projects and capital spending
The "Saudi Economic Outlook" report highlighted the vital role of major projects in this growth, with projects valued at approximately SAR 305 billion, representing about 6.4% of GDP, expected to be completed. This substantial expenditure not only strengthens infrastructure but also directly contributes to reducing unemployment rates and improving domestic consumption levels, especially given the anticipated decline in borrowing costs and two interest rate cuts during 2026.
Financial indicators and monetary stability
Regarding public finances, the report projected that public revenues would rise to SAR 1.147 trillion, supported by a SAR 412 billion increase in tax revenues. Despite projections of a rise in public debt to SAR 1.622 trillion (32.7% of GDP), this ratio remains within internationally safe limits, reflecting the strength of the Kingdom's financial position and its ability to finance its development projects.
Regional and international importance
This anticipated growth carries significant implications that extend beyond local borders. The stability and growth of the Saudi economy—the largest in the Middle East—strengthens the region's economic stability and attracts foreign direct investment. Furthermore, the Kingdom's commitment to OPEC agreements, coupled with the expected increase in production to 10.2 million barrels per day, underscores its pivotal role in ensuring global energy security and market stability.
Key predictions for 2026:
- Real GDP growth of 4.6%.
- The inflation rate has fallen to 2.0%, in line with global estimates.
- The implied oil price in the budget is between $60 and $63 per barrel.
- Continued focus on artificial intelligence projects and infrastructure for major events.
