RIYADH: Saudi Arabia’s gross domestic product is expected to expand by 4.5 percent in 2026, outperforming the global growth average of 3.4 percent, according to a Standard Chartered Global Research analysis.
In its latest report, the firm said the robust outlook will be driven by sustained momentum in both the Kingdom’s hydrocarbon and non-oil sectors.
The forecast places the Kingdom’s growth above that of many major economies and broadly aligns with the International Monetary Fund’s October outlook, which projects Saudi Arabia’s GDP to expand by about 4 percent in both 2025 and 2026.
Mazen Bunyan, CEO of Standard Chartered, Saudi Arabia, said: “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.”
He added: “In this context, continued non-oil sector growth will ensure sustained financial stability whilst diversifying growth sources across the Kingdom.”
Strengthening the non-oil sector is a key objective of Saudi Arabia’s Vision 2030 agenda, as the Kingdom continues to reduce its long-standing reliance on crude revenues.
According to the report, Saudi Arabia’s hydrocarbon sector returned to growth this year after OPEC+ eased production cuts that had been in place since 2023.
The non-oil sector is also expected to expand steadily at 4.5 percent, supported by investment and consumption, and will continue to underpin economic growth.
Amid projections for twin deficits between 2026 and 2028, Standard Chartered expects Saudi Arabia’s public debt-to-GDP ratio to rise to 36 percent by the end of 2026, from 26 percent at the end of 2024, bringing it closer to the Kingdom’s self-imposed ceiling of 40 percent.
“Even so, Standard Chartered Global Research believes that recent fiscal deficits have not been a setback, but rather a catalyst for structural macroeconomic transformation,” said the report.
It added that policymakers are expected to continue diversifying funding sources in 2026, seeking to attract greater foreign direct investment alongside increased foreign participation in domestic debt markets.
“Increased capital flows are likely to support the Kingdom’s capital market momentum, notably thanks to greater inclusion in leading investment indices,” added the report.
UAE foreign trade set to hit $1tn
In the same report, Standard Chartered said that the economy of the UAE is expected to expand by 5 percent this year, up from its previous 4 percent estimate.
The firm projected that the Emirates’ economy will stay resilient due to strong domestic demand, and it will offset the impact of softer oil prices.
The bank also expects the country’s total foreign trade to hit the $1 trillion mark in 2026, with the critical UAE-Asia corridor contributing one-third of that volume.
The country’s non-oil sector is expected to expand by 4.5 percent this year, driven by favorable demographics and a thriving property sector.
“The UAE remains a bright spot on the global map, with the nation expected to remain on track to deliver growth at potential for two consecutive years in 2026,” said Rola Abu Manneh, CEO of UAE, Middle East & Pakistan at Standard Chartered.
She added: “As we look toward the projected $1 trillion in foreign trade volumes, the UAE is rapidly cementing its status as a super-connector, navigating seamlessly through global trade fragmentations and thriving within them.”
According to the report, the UAE is expected to maintain twin surpluses, supported by deep domestic liquidity.
With deposit growth currently outpacing strong private-sector credit expansion of 9.1 percent year on year in mid-2025, the UAE also has the lowest loan-to-deposit ratio in the Gulf Cooperation Council region.
