Resilient Growth, Deepening Markets: Signals from Riyadh

Last week, we showcased an economy in motion, balancing fiscal realignment, moderating oil output, and strong non-oil momentum. Beneath the headlines, the private sector and capital markets continued to deliver, underscoring the depth and adaptability of the Kingdom’s transformation story.

Economic indicators in focus

The General Authority for Statistics revised the 2024 annual national accounts, reporting real GDP growth of 2.7%, whereby non-oil activities expanded by 6.0% while oil activities contracted by 4.4%. Wholesale and retail trade, restaurants, and hotels together accounted for 9.2% of nominal GDP, reflecting the rising weight of services and domestic consumption.

This trend is mirrored in the Riyad Bank Non-Oil PMI, which climbed to 60.2 in October 2025 – one of the strongest readings in more than a decade. New orders, output, and hiring all accelerated, and firms increased inventories to meet stronger demand. These indicators suggest that the Kingdom’s private sector remains an anchor of growth despite headwinds in global trade and energy markets. The data points to sustained domestic demand and expanding private-sector dynamism, both essential to broadening the growth base in the years ahead.

Oil market signals

OPEC+ agreed to a modest incremental increase of 137,000 barrels per day for December, with a pause on further hikes through the first quarter of next year. The move appears calibrated to manage seasonal demand softness and to reduce the risk of an oversupplied winter market.

Saudi Aramco trimmed official selling prices to Asia for December, lowering the Arab Light premium to its lowest level in nearly a year – a pragmatic response to softer Asian demand. Together these decisions illustrate a dual objective: to preserve market share and to avoid unnecessary price volatility while global demand patterns remain uncertain.

Capital markets and funding activity

Saudi Arabia’s capital markets remained active and investor-friendly, underscoring growing depth, confidence, and sophistication among both issuers and investors. Sovereign-backed entities and leading domestic corporates tapped the market across multiple tenors, currencies, and capital structures, signalling broad investor appetite and a healthy funding environment.

Avilease, the Public Investment Fund-backed aircraft lessor, began marketing a five-year US dollar-denominated bond. Gulf International Bank Saudi Arabia completed a landmark USD 500 million Additional Tier 1 issuance, Cenomi Centres opened subscriptions for a SAR-denominated sukuk under its SAR 4.5 billion domestic issuance programme, and Alinma Bank closed a USD 500 million, ten-year Tier 2 sukuk callable after five years.

These issuances indicate healthy international and domestic investor appetite for high-quality issuers and sovereign-related credits, and they reflect increasing sophistication in the Kingdom’s debt markets, with issuers using a range of tenors and capital structures to meet funding needs.

SMEs and the Biban Forum

The Biban Forum concluded with agreements and MoUs surpassing SAR 38 billion, and a concentrated push to scale up SME financing and entrepreneurship support. The forum delivered multiple financing portfolios, facility launches, and international partnerships aimed at enhancing access to capital, mentoring, and digital infrastructure for entrepreneurs.

Importantly, the Biban agenda moved beyond transactional pledges. The emphasis included building pipeline programmes, improving financing instruments that suit SME cash flows, and fostering international cooperation to accelerate technology transfer and market access. These measures will help strengthen the middle layer of the economy and support the national target to raise SME contributions to GDP.

Mergers and acquisitions, regionally

The EY MENA M&A Insights report for the first nine months of 2025 recorded 649 deals with a total disclosed value of USD 69.1 billion – a 23% increase in deal volume year-on-year. The GCC remained the epicentre, accounting for the majority of deal flow.

This surge in M&A reflects both abundant regional liquidity and an increasing appetite for consolidation, efficiency gains, and access to growth verticals aligned with national transformation strategies. The trend also signals that private capital – domestic and regional – is becoming more strategic and less speculative, a healthy sign for sustainable growth.

Conclusion

The week’s developments reinforce a clear narrative: Saudi Arabia is transitioning from a cyclical, oil-centred model toward a broader, more productive economy. Non-oil sectors are delivering meaningful growth, private markets are maturing, and capital is flowing into the instruments and assets that underpin diversification.

That said, the fiscal backdrop remains a constraint. The widening budget deficit and volatile oil receipts underline the need to continue expanding non-oil revenues and to deepen private capital markets so that growth can be sustained without recurring fiscal stress.

For investors and policymakers, the implication is straightforward. Opportunities linked to productivity gains, domestic consumption, technology adoption, and SME scaling are where structural returns will emerge. Policy and capital allocation focused on these areas will matter most in the next phase of the Kingdom’s economic evolution.

Sources

General Authority for Statistics (GASTAT): Annual National Accounts 2024 Revision Report• Ministry of Finance (Saudi Arabia): Q3 2025 Budget Performance Report• Riyad Bank Non-Oil PMI: October 2025 Release• Reuters: “OPEC+ Agrees Modest Output Increase, Pauses Further Hikes Through Q1 2026”• Bloomberg: “Saudi Aramco Cuts December Official Selling Prices to Asia”• Argaam / Zawya: Coverage on Avilease, Gulf International Bank, Cenomi Centres, and Alinma Bank bond and sukuk issuances• Saudi Press Agency (SPA): Biban Forum 2025 Summary and Monsha’at Announcements• EY MENA M&A Insights Report (Q3 2025)