Non-oil activities in Saudi Arabia continued to record growth during the third quarter of 2026, at a time when the performance of the gross domestic product was affected by the decline in oil activities, according to the rapid estimates of the General Authority for Statistics, which showed a decline in the real gross domestic product by 3.8 percent compared to the same period last year.
The data showed non-oil activities growing by 1.9 percent on an annual basis, while oil activities declined by 20.4 percent, and government activities declined by 2.7 percent.
Regarding the contribution of activities to the annual change in GDP, oil activities recorded a negative contribution of 4.7 percentage points, while government activities contributed a decrease of 0.4 percentage points. In contrast, non-oil activities made a positive contribution of 1.1 percentage points, in addition to the contribution of net product taxes of 0.1 percentage points.
On the other hand, the data showed an improvement in the performance of the economy on a quarterly basis, as the seasonally adjusted real gross domestic product increased by 1.3 percent during the third quarter compared to the second quarter of the current year.
This increase was driven by a growth in oil activities by 5.7 percent on a quarterly basis, and non-oil activities by 0.6 percent, while government activities decreased by 1.2 percent.
According to the contribution of activities to quarterly growth, oil activities contributed about one percentage point, non-oil activities contributed 0.4 percentage points, and net taxes on products contributed 0.2 percentage points. In contrast, government activities recorded a negative contribution of 0.2 percentage points.
These indicators reflect the difference in performance trends when compared annually and quarterly. While the comparison with the third quarter of last year showed a decline in domestic product, the economy recorded growth compared to the second quarter of the current year after excluding seasonal and calendar effects.
Christine Lagarde’s announcement of her departure from the presidency of the European Central Bank about 9 months before the end of her term was not merely an advance of the date for handing over the position; Setting February 7, 2027 as the departure date, instead of October of the same year, places the decision at the heart of a sensitive European political entitlement, before the French presidential elections scheduled for the spring of next year, and at a time when attempts by right-wing populist forces to redraw the relationship between national governments and European Union institutions are escalating.
While Lagarde said that her decision was linked to her desire to restore freedom of expression and engage in issues beyond monetary policy, the timing of her departure opened the door to a broader political reading: Are European leaders seeking to resolve the succession to the presidency of the Central Bank before the balance of power changes in France, which may allow forces more skeptical of European integration to influence the selection of one of the most important economic positions on the continent?
These questions gain their importance because the confrontation between the populist right and European institutions is no longer limited to calling for exit from the Union or rejecting joint action, but rather includes attempts to change the nature of these institutions and their powers from within, and redistribute influence between them and national governments.
In an interview with the French newspaper Les Echos on July 2, 2026, Lagarde hinted at her desire to play a role in the French presidential elections, saying: “A European voice should be heard in the French presidential debate.” She explained that she is not thinking about running in the elections as a candidate, but she prefers to contribute to the electoral debate and influence its course, noting that this may require her to leave the presidency of the European Central Bank before the end of her term.
From rejecting the union to trying to reshape it
Over the years, the rise of right-wing populist movements in Europe has been linked to positions rejecting European integration, and to calls for countries to regain powers that these parties say were transferred to Brussels. But the scene gradually developed; All of these forces no longer deal with the dismantling of the Union or exit from it as a main goal. Rather, some of them are now proposing a vision of a “Europe of Nations,” in which national governments will be the primary decision-makers, while reducing the powers of supranational institutions.
This means that the confrontation moved from objecting to the Union from outside it to trying to influence its work rules and institutions from within it. This approach appears in the positions of parties such as the French National Rally and the Alternative for Germany, which call for reformulating the relationship between member states and the Union’s institutions, even if their positions differ in the details of economic and financial policy and the limits of the required reform.
While this approach focuses on national sovereignty and limiting the powers of joint institutions, the European Union remains based on the principle of sharing some powers between member states, and on their being subject to common rules and decisions. Hence the confrontation arises over the role of the European Commission and the European Parliament, as well as institutions that enjoy legal independence from governments, most notably the European Central Bank.
This shift does not mean that the European right adopts a unified position on the future of the Union. There are differences between its parties regarding the extent of their desire to change institutions or reduce their powers, and their positions on monetary and financial policy also differ. But the common denominator among a number of them is the objection to the transfer of more powers to European institutions that are not directly subject to national electoral accountability.
The central bank is at the heart of the confrontation
The European Central Bank stands out as one of the most sensitive institutions in this struggle, given its independence from governments and the direct impact of its decisions on the economies of the eurozone countries. The institution is responsible for price stability, its monetary policy is determined collectively through the Board of Governors, and its decisions are not supposed to be subject to the financing needs or electoral priorities of any government.
But this independence puts it in the face of some demands of populist forces, especially when it comes to the rise in public debt and borrowing costs. In France, leaders in the National Rally put forward ideas calling on the European Central Bank to resume quantitative easing, including bond purchases and liquidity injections, to help deal with the debt burden.
These demands clash with the nature of the mandate granted to the bank, which focuses on price stability, and European rules that prohibit financing governments directly. The resumption of bond purchases for the purposes of alleviating debt burdens also raises questions about the boundaries separating monetary and fiscal policies, and the extent of the bank’s ability to maintain the independence of its decisions if the financial needs of governments become a factor pressuring its directions.
The French President, regardless of his political orientation, does not have the authority to direct the bank’s decisions or impose a change in its objectives. Monetary policy is decided by the Governing Council, which includes members of the Executive Board and governors of the national central banks in the euro area. But the arrival of a government more skeptical of European integration may change the nature of the political debate about the role of the bank, and increase pressure on the institution in the files of debt, spending, and monetary easing.
Why does the timing of Lagarde's departure matter?
Here the battle for the independence of institutions intersects with the Lagarde decision. Her departure in February allows European leaders to choose her successor before the French elections in April, at a time when President Emmanuel Macron cannot run for a third term, and when opinion polls raise the possibility of the National Rally rising to an advanced position in the presidential race.
If Lagarde had waited until the end of her term in October, the selection of the bank's new president would have coincided with a different French political phase, and perhaps with new leadership in the Elysee Palace. As for advancing the departure date, it gives Macron and his European partners an opportunity to participate in the succession process before the vote, although the final decision does not rest with Paris alone.
According to European Union rules, the European Council appoints the head of the Central Bank after a nomination process and consultations that include the relevant institutions, including the European Parliament and the Bank’s Board of Governors. Therefore, Macron cannot choose the next president alone, but he remains an influential party in the European negotiations that precede the appointment.
Media reports had linked the timing to the desire to ensure the selection of a pro-European integration figure before the French elections. However, Lagarde did not announce that this consideration was the reason for her departure, but rather confirmed that her decision was related to her desire to express her positions on issues that do not fall within the jurisdiction of the Central Bank.
She said, during a press conference on October 29, that she wants freedom of expression and engagement in matters that go beyond monetary policy, explaining that bank officials are obligated to be neutral, and that this commitment is “the price we pay for independence.” She added that she no longer feels comfortable remaining silent about broader developments in Europe and the world, and that she has something she wants to say based on her experience in international economic and financial institutions.
The independence of institutions faces a political test
The importance of succession is not limited to the identity of the next president, but extends to the message that the appointment will send regarding the European Union’s ability to protect the independence of its institutions in light of the changing balance of political power. The Central Bank is not the only institution facing objections from parties calling for reducing Brussels’ powers. This confrontation includes the European Commission, the European Parliament, and common policies on immigration, budget, and economic sovereignty.
On the other hand, the rise of the right does not mean that these institutions will automatically lose their independence. Appointments are subject to multilateral European procedures, and monetary policy decisions cannot be imposed by any national leader alone. The positions of the right-wing parties are not identical, and they cannot be treated as a single bloc with a unified program towards the Central Bank or the European Union.
But the expanding influence of these forces in parliaments and national governments makes them more able to influence European negotiations and common policy priorities, even without changing treaties or abolishing existing institutions. This makes the upcoming succession a political and institutional test that goes beyond choosing a new name to head the bank.
As for Lagarde, she says that she wants to leave her position because she believes that the bank is able to continue its work smoothly, and she confirmed that the process of identifying her successor has already begun. There were reports about the possibility of her moving to the presidency of the World Economic Forum in Geneva, but this possibility had not turned into an announced appointment or a final decision.
In conclusion, Lagarde's early departure does not prove that she came exclusively to prevent the right from influencing the choice of her successor, but it comes at a time that makes this dimension strongly present in the reading of the decision. The broader issue is whether European institutions are able to maintain their independence and operating rules at a stage in which political forces are advancing and demanding the return of powers to national capitals. From this perspective, the battle to succeed Lagarde appears to be one of the testing stations for the relationship between the future of European integration and the rise of the populist right.
The attention of Wall Street investors is turning to the American polls, on Tuesday, in a week in which political calculations intertwine with market bets on artificial intelligence and the path of interest rates, as the midterm congressional elections may have repercussions that extend beyond the balance of power in Washington, to affect the trends of government spending and oversight of technology companies, as well as the dollar and US treasury bonds.
This entitlement comes at a time when US stocks are facing increasing pressure due to doubts about the financial returns of huge investments in artificial intelligence, and after the shares of technology companies declined following business results that did not dispel investors’ concerns about the cost of expanding data centers and computing capabilities. At the same time, investors are awaiting the results of major companies, including Apple, AMD, and Palantir, and the monthly jobs report, in search of new indicators regarding the strength of the economy and the possibility of raising interest rates again.
Political calculations in the markets focus on the possibility of the Democrats succeeding in seizing control of the House of Representatives from the Republicans, with the competition for the Senate remaining more open. Investors believe that the changing balance of power in Congress may open the door to greater scrutiny of data center projects, especially in light of local objections to their impact on energy costs and the environment, in addition to potential increased oversight of technology companies, banks, and cryptocurrency companies.
The potential repercussions are not limited to technology stocks; The Democrats' victory in both chambers may also be reflected in the dollar, by increasing the possibility of political stumbling in Washington, whether in negotiations related to government financing or the debt ceiling, as well as the potential impact on sentiment already damaged by concerns surrounding the artificial intelligence sector.
A Wall Street Journal report quoted Francesco Pesoli, foreign exchange strategist at ING, as saying that a broad victory for the Democrats may put limited pressure on the dollar from several angles, including increasing the risks of a government shutdown and stumbling in debt ceiling negotiations, in addition to the possibility of worsening negative sentiment surrounding artificial intelligence.
In the stock market, Rick Meckler, a partner at Cherry Lane Investments, said that the Democrats’ victory by a large margin may be seen as a negative factor for the shares of artificial intelligence companies and the technology sector in general, and perhaps the entire market. These concerns stem from the possibility that the expansion of data centers will be subject to greater scrutiny, in light of the growing debate about energy consumption, electricity costs and the environmental impacts of these facilities.
The elections come amid mounting questions about the ability of major technology companies to transform their increasing spending on artificial intelligence into financial returns that justify the volume of investments. The results of Alphabet and Amazon, two of the largest companies investing in data centers, increased concerns about financing this expansion and the economic feasibility of it, while Intel shares fell by about 29 percent, on Friday, after announcing its results.
The Standard & Poor's 500 index fell by 1.8 percent in Friday's session, while the Nasdaq Composite index fell by 2.9 percent, affected by the weakness of technology and artificial intelligence stocks. Marta Norton, chief investment strategist at Empower, said that the market appears turbulent due to ongoing, and perhaps increasing, artificial intelligence concerns, noting that investors are still digesting recent company results.
Busy week for corporate results
In parallel with the elections, the third quarter results announcement season continues, which has so far shown a strong earnings performance. The profits of Standard & Poor's 500 index companies were heading to rise by 31.6 percent during the quarter, according to LSE GI BES data until Friday, after more than half of the index companies announced their results.
But rising profits did not prevent investors from punishing companies that did not meet their high expectations. Caterpillar shares fell 9 percent on Thursday, after the company maintained its annual sales growth expectations, despite strong demand for power equipment used in data centers.
Chris Galuppo, chief market strategist at the Franklin Templeton Institute, said that the ceiling of expectations for profits is very high, and that companies that do not meet or exceed these expectations face pressure in their stocks.
Apple will announce its results on Monday, while investors are also awaiting the results of AMD, Qualcomm, and Palantir, which provide additional indications of the direction of spending related to artificial intelligence. The list of companies announcing their results next week also includes “McDonald’s,” “Amgen,” and “ConocoPhillips,” in addition to more than 100 companies listed in the Standard & Poor’s 500 index.
Jobs face interest rate hike expectations
On the macroeconomic level, the US jobs report for October will be released on Friday, constituting an important test of monetary policy expectations, after the Federal Reserve kept interest rates unchanged at its last meeting, while markets still expect a new increase in December.
Market data, according to LSEG, shows a 76 percent probability of raising interest rates by a quarter of a percentage point at the December 9 meeting, and markets are pricing in at least two increases over the next 12 months. According to the Wall Street Journal report, changing these expectations in a significant way may require employment data to be much weaker than expected.
Financial institutions expect modest growth in employment as the unemployment rate stabilizes. Analysts at LBBW said that a 25 basis point rate hike in December is still highly likely, despite their expectations of weak job growth.
Before the monthly report is issued, investors are awaiting the job openings data for September, scheduled to be announced on Tuesday, the private sector employment report issued by ADP on Wednesday, and weekly unemployment claims on Thursday. Purchasing managers' indices for the industrial and service sectors for October will also be released, in addition to the preliminary reading of the Consumer Confidence Index issued by the University of Michigan for November.
In the third quarter, the US economy recorded its fastest pace of growth in a year, supported by strong consumer spending and increased corporate investments in artificial intelligence.
