Growth Holds Firm as Capital Markets Open Further

Welcome to this week’s summary, which focuses on the Kingdom of Saudi Arabia’s continued economic momentum and the ongoing development of its capital markets. Solid real GDP growth in 2025, supported by both oil and non oil activities, reflects the resilience and diversification of the Saudi economy. At the same time, key regulatory reforms, including the opening of the Saudi capital market to foreign investors and the extension of incentives to support sukuk and debt capital markets, demonstrate the Kingdom’s commitment to deeper international integration while maintaining strong regulatory oversight.

Economic Growth Driven by Broad-Based Sector Performance 

According to the flash estimates released by the General Authority for Statistics (GASTAT), Saudi Arabia’s real GDP expanded by 4.5% in 2025, reflecting continued economic momentum and the impact of ongoing structural reforms.

Growth during the year was supported by balanced contributions across key sectors. Oil activities recorded the strongest performance, increasing by 5.6%, while non-oil activities grew by a robust 4.9%, underscoring the resilience and diversification of the domestic economy. Government activities increased modestly by 0.9%, contributing positively on an annual basis.

In Q4 2025, oil activities were the main driver of real GDP growth, contributing 2.5 percentage points, followed by non-oil activities at 2.3 percentage points and net taxes on products at 0.2 percentage points, while government activities had a negative contribution of 0.2 percentage points.

Quarterly dynamics highlighted a notable acceleration toward year-end. In Q4 2025, real GDP rose by 4.9% year-on-year compared to Q4 2024, driven primarily by a 10.4% surge in oil activities, which emerged as the leading contributor to quarterly growth. While government activities declined during the quarter, slightly weighing on overall performance, sustained expansion in non-oil sectors continued to support economic growth.

Saudi Capital Market Opened on 1 February to All Foreign Investor Categories 

The Capital Market Authority announced that as of 1 February, the Saudi capital market was officially opened to all categories of foreign investors, enabling direct investment in the market. The decision follows the Authority’s Board approval of the regulatory framework permitting non-resident foreign investors to invest directly in the Main Market, marking a significant milestone in the continued liberalization of Saudi Arabia’s capital markets.

CMA Extends Fee Exemptions for Debt Issuances

The Capital Market Authority announced the extension of exemptions from regulatory fees on applications for debt instruments offerings and confirmed that it will continue to bear registration and listing costs for selected issuances until 2027, with the aim of supporting and developing the sukuk and debt capital markets. The decision seeks to encourage issuers to enter the market, enhance its attractiveness, and expand the base of local and international issuers and investors, while improving companies’ access to long-term financing at competitive costs and promoting the adoption of credit ratings to enhance issuance quality, disclosure standards, and investor confidence. The exemption applies to qualifying public and private offerings by non-government entities with valid and publicly disclosed credit ratings from CMA-licensed agencies, limited to two issuances per issuer, with private offerings capped at SAR 500 million, and includes fees charged by the Saudi Exchange (Tadawul) and the Securities Depository Center (Edaa), subject to an annual cap of SAR 5 million through 2027. 

Recent economic growth and capital market reforms underscore Saudi Arabia’s continued progress in diversification, market openness, and debt market development, reinforcing its position as a resilient and competitive destination for global investors.

Sources

• General Authority for Statistics (GASTAT) – Flash Estimates of Real GDP Growth, 2025 

• Capital Market Authority (CMA) – Opening of the Saudi Capital Market to Foreign Investors 

• Capital Market Authority (CMA) – Extension of Fee Exemptions for Sukuk and Debt Instruments Issuances 

• Saudi Exchange (Tadawul) and Securities Depository Center (Edaa) – Market and issuance data