According to Standard Chartered Global Research, Saudi Arabia is projected to produce a strong gross domestic product (GDP) growth rate of 4.50 percent in 2026, compared to the 3.40 percent growth rate of the global economy.
In its recent Global Focus report, Standard Chartered credits the Kingdom with a sustained momentum in the oil sector as a source of its economic resilience.
Since OPEC+ relaxed the production cuts that it has applied since 2023, the hydrocarbon industry is now once again on the growth path. The non-oil industry is anticipated to soar continuously at 4.50 percent through investment and consumption, and will remain in favor of the economy.
CEO of Standard Chartered Saudi Arabia, Mazen Bunyan, commented that “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. In this context, continued non-oil sector growth will ensure sustained financial stability whilst diversifying growth sources across the Kingdom.”
Therefore, the prospects of a further rise in leverage in the sector may have further negative growth risks. Standard Chartered forecasts the Kingdom’s public debt-to-GDP to surge 36 percent by the end of 2026 from 26 percent at end-2024, taking it closer to the Kingdom’s self-imposed 40 percent ceiling.
However, this follows the forecasts of twin deficits between the years 2026 and 2028.
In addition, the report noted that policymakers will make efforts in the diversification of funding sources in 2026 to strengthen the economy, as they would aim to propel more foreign direct investment (FDI), coupled with more foreign investors’ involvement in domestic debt markets.
Increased capital flows would also help the capital market momentum in the Kingdom, particularly due to increased inclusion in major investment indices.
The headline seasonally adjusted Purchasing Managers’ Index (PMI) of Saudi Arabia went down to 57.4 percent in December 2025 from 58.5 percent in November.
