The Overall Landscape: Liquidity Pressures and Wealth Shifts
The year 2026 began with the Saudi economy undergoing a structural shift in liquidity behavior, amid oil prices stabilizing at moderate levels. Depositors’ preferences changed significantly, as demand deposits declined by 15% year-on-year, while Brent crude prices averaged around $68 per barrel in 2025.
This shift reflects a high-interest-rate environment that pushed individuals and companies to seek higher returns. As a result, non-interest-bearing deposits fell by 18.3%, while savings and time deposits rose sharply. This placed noticeable liquidity pressure on banks, with the loan-to-deposit ratio (LDR) exceeding 113.2%, surpassing comfortable regulatory levels.

Real Estate and Construction Sector: Between Relative Calm and a Mortgage Crisis
The real estate and construction sector experienced sharp contrasts and structural paradoxes. After years of exceptionally high figures, 2025 witnessed a clear slowdown in the awarding of mega projects. The value of awarded projects declined by 67% to SAR 199.4 billion, with the fourth quarter alone recording a steep 88% drop.
In the housing sector, the market faced a severe financing shock. New mortgage originations for individuals fell by 55.6% in November 2025 compared to the previous year. The decline affected villas, apartments, and land alike, reflecting weakened purchasing power due to high interest rates and elevated prices.
Non-Oil Economy and Labor Market
Despite challenges, the non-oil economy demonstrated resilience. The Purchasing Managers’ Index (PMI) remained in expansion territory at 57.4 points. Domestic cement sales increased by 10.3%, confirming continued activity in ongoing construction projects. In the labor market, unemployment among Saudis rose to 7.5% in the third quarter of 2025, driven by higher labor force participation and matching challenges.
Outlook and Expectations for 2026
Brent crude oil prices are expected to average $63 per barrel, placing pressure on the fiscal balance, with financing needs estimated at SAR 165 billion. Overall economic growth is projected at 4.7%, supported by strong non-oil sector growth. Inflationary pressures are expected to ease, with average inflation declining to 1.7% in 2026.
In summary, the economic narrative of 2026 can be described as a story of balance management—balancing ambitious mega projects with available liquidity, under lower oil prices that require fiscal discipline and innovative financing solutions