RIYADH — Saudi Arabia's nominal GDP rose 6.3 percent year-on-year to SR1.274 trillion in the first quarter of 2026, driven primarily by a 12.3 percent increase in oil activities, according to the Ministry of Investment's May 2026 Monthly Bulletin. The report highlighted the Kingdom’s economic growth with real GDP expanding 3 percent year-on-year in Q1 2026. Gross Fixed Capital Formation (GFCF), a key measure of investment, increased 5.1% in the first quarter after contracting through much of 2025. **media[2720190]** Total GFCF reached SR358.3 billion, with the non-government sector accounting for SR319.9 billion, or 89 percent of total investment. Government investment recorded strong growth, with government GFCF surging 54 percent year-on-year to SR38.3 billion during the quarter. The bulletin also indicated stable inflationary conditions, with the Consumer Price Index remaining at 1.7 percent in April 2026. This was mostly due to a 3.8 percent increase in housing, water, electricity, gas, and other fuels, as well as a 1 percent rise in both transportation and restaurant and accommodation services. Consumer activity remained resilient, with point-of-sale transactions rising 11.8 percent year-on-year in April, indicating continued strength in household spending. **media[2720191]** Meanwhile, average brent crude prices climbed 54.2 percent year-on-year to $102.5 per barrel in April, providing support to oil-sector revenues and economic activity. Labor market indicators also improved. Saudi unemployment fell to 7.2 percent in the fourth quarter of 2025, down from 7.5 percent in the previous quarter. The report highlighted continued growth in financing for small and medium enterprises (SMEs), which accounted for 11.5 percent of total credit facilities, with credit facilities extended to the sector reaching a record SR468 billion in the fourth quarter of 2025, up 33 percent year-on-year. Foreign investor participation in Saudi capital markets remained strong, with foreign holdings reaching SR458 billion in May 2026. Despite the positive indicators, the bulletin noted several areas of moderation. The Purchasing Managers' Index (PMI) for the non-oil private sector declined 5.4 percent year-on-year to 52.8 points in May. However, the reading remained above the 50-point threshold that signals expansion.
