Saudi Arabia’s crude oil production rose to 8 million barrels per day (mbpd) in September 2026, an increase of 12.2% month-on-month, while Brent crude prices settled at $103.5 per barrel at the end of the month, according to Al Rajhi Capital Research.

The increase in oil output, alongside elevated crude prices amid ongoing geopolitical tensions, comes as indicators point to improving conditions in the Kingdom’s non-oil economy.

Saudi Arabia’s Purchasing Managers’ Index (PMI) advanced to 55.3 in September, its strongest reading since February, signalling an acceleration in non-oil private sector business activity. The Al Rajhi Capital Saudi Construction Index also remained in expansionary territory at 54.4.

Consumer spending continued to support domestic demand, rising 6.4% year-on-year in August to SAR142 billion. E-commerce spending surged 26%, highlighting the growing contribution of digital channels to consumption.

However, the broader economic picture remains mixed. Saudi Arabia’s real GDP contracted 4.7% year-on-year in the second quarter of 2026, primarily due to a 24.8% decline in oil activities. Non-oil activities and government services each grew by 0.9%.

Inflation edged up to 1.9% in September from 1.8% in August, driven partly by a 3.6% increase in housing and utilities costs. The national unemployment rate, meanwhile, declined to 6.5% in the second quarter, compared with 6.8% a year earlier.

Fiscal spending is also expected to exceed initial projections. Al Rajhi Capital estimates 2026 expenditure at SAR1.435 trillion, 9.3% above budget, while revenue is projected at SAR1.19 trillion, 3.7% above budget. The resulting deficit is estimated at SAR245 billion, equivalent to 4.9% of GDP.

Other indicators point to pockets of weakness. Residential real estate transaction values fell 39% year-on-year in September to SAR8.7 billion, while commercial transaction values declined 32% to SAR5.4 billion. Merchandise exports also dropped 17.2% in July to SAR84.4 billion, while imports fell 15.4% to SAR70 billion.

In the banking sector, credit growth reached 7% year-on-year in August, compared with deposit growth of 5.7%. Saudi Arabia’s three-month interbank offered rate averaged 5% in September, down from 5.27% a year earlier.

The Tadawul All Share Index (TASI) declined 6.2% in September, while average daily traded value fell 26%. -TradeArabia News Service