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A report from Riyad Capital anticipates Saudi Arabia’s economy entering a strong expansion phase next year after a subdued 2026. The bank’s Second Quarter 2026 Saudi Economic Chartbook prepared by chief investment officer Hans Peter Huber forecasts real GDP growth accelerating to 6.8 percent in 2027 from only 0.9 percent the prior year. Oil output is projected to increase to 10.4 million barrels per day in 2027 from 9.1 million barrels per day in 2026 while Brent crude averages 75 dollars per barrel down from 86 dollars. The assessment assumes gradual reopening of the Strait of Hormuz from September 2026 following earlier disruptions.
The Riyad Capital document stated that the anticipated rebound is expected to be driven by a recovery in oil production alongside continued momentum across non-oil sectors highlighting the Kingdom’s dual growth engine as it advances its Vision 2030 transformation agenda. Oil sector activity is seen contracting 3.6 percent in 2026 before expanding 14.3 percent in 2027. Non-oil activities are forecast to grow 3.0 percent this year and then 4.7 percent next year while government activities advance 1.5 percent and 1.3 percent respectively over the two years.
Trade and fiscal balances form a key part of the Riyad Capital projections. The report places the trade surplus at 455 billion Saudi riyals or 8.8 percent of GDP in 2026 narrowing to 410 billion riyals or 7.6 percent of GDP in 2027. The fiscal deficit is expected to decline from 228 billion riyals equivalent to 4.4 percent of GDP this year to 189 billion riyals or 3.5 percent of GDP next year. Government debt is anticipated to rise from 1.75 trillion riyals to 1.94 trillion riyals over the period.
Inflation and labour market indicators are also covered in the bank’s outlook. Consumer prices are projected to increase 2.1 percent in 2026 before easing to 2.0 percent in 2027 according to the chartbook. The three-month SAIBOR rate is seen falling from 4.75 percent to 4.25 percent while overall unemployment declines from 3.2 percent to 3.0 percent and Saudi national unemployment drops from 7.1 percent to 6.9 percent.
International forecasts remain more measured than the Riyad Capital view. World Bank data shows Saudi GDP growth averaging 4.6 percent across 2026 and 2027 with hydrocarbon output expanding sharply as OPEC+ cuts are phased out and non-oil GDP rising 3.6 percent on average. International Monetary Fund projections place growth at 3.1 percent in 2026 and 4.5 percent in 2027. S&P Global raised its own 2027 forecast to 4.7 percent citing resilient domestic demand and reform progress.
Vision 2030 investments in tourism logistics manufacturing technology and services continue to underpin the non-oil expansion detailed by Riyad Capital. The bank’s report ties lower borrowing costs and steady private sector activity to broader economic resilience. Such diversification efforts have gained added importance as the Kingdom manages the transition from hydrocarbon dependence.
