Standard Chartered Global Research expects Saudi Arabia GDP growth to reach 4.5% in 2026, significantly outpacing the projected 3.4% global economic growth rate. The forecast highlights sustained momentum in both oil and non-oil sectors as key drivers of the Kingdom’s economic performance.
Oil Sector Recovery Drives Economic Momentum
The bank’s latest Global Focus report attributes Saudi Arabia’s economic resilience to the hydrocarbon industry’s return to growth following OPEC+ easing production cuts that had been in place since 2023. This development marks a significant shift in the Kingdom’s oil production capacity and export potential.
The non-oil sector is also expected to maintain steady growth at 4.5%, driven by increased investment and consumption patterns. This balanced expansion across both sectors demonstrates the Kingdom’s diversification efforts while maintaining its energy sector strength.
Rising Leverage Poses Financial Risks
Despite positive growth projections, Standard Chartered identifies elevated risks from increasing leverage across sectors. The bank forecasts Saudi Arabia’s public debt-to-GDP ratio will rise to 36% by end-2026, up from 26% at end-2024, approaching the Kingdom’s self-imposed 40% ceiling.
Projections indicate twin deficits between 2026 and 2028, though analysts view recent fiscal deficits as catalysts for structural macroeconomic transformation rather than setbacks. The Kingdom plans to diversify funding sources and attract greater foreign direct investment to support capital market momentum.
“While the 2026 growth outlook for Saudi Arabia is strong, it comes with elevated downside risks to oil prices, a sector set to make a comeback in the next year. Continued non-oil sector growth will ensure sustained financial stability whilst diversifying growth sources across the Kingdom.”
Mazen Bunyan, CEO of Standard Chartered Saudi ArabiaGlobal Economic Context and Regional Outlook
Standard Chartered raised its US growth forecast for 2026 to 2.3% from 1.7%, expecting strong business investment supported by corporate tax cuts and AI adoption. China’s growth forecast increased to 4.6% from 4.3%, while Euro-area growth projections remain modest at 1.1% due to trade pressures and uneven economic performance across member states.
The bank’s analysis indicates that Saudi Arabia GDP growth projections remain robust compared to major global economies, positioning the Kingdom as a regional economic leader. Increased inclusion in leading investment indices is expected to support capital market development and attract international investment flows.
