Saudi Arabia’s GDP shrank 4.8% in the second quarter as oil output was hit by the closure of the Strait of Hormuz, marking the sharpest economic contraction since the pandemic.
The non-oil economy, the main engine of job creation and economic diversification, expanded on an annual basis, although its growth slowed to 0.6%, according to flash estimates published Thursday.
The IMF said in a statement Wednesday that the Saudi economy had “proven resilient in the face of the war in the Middle East, supported by strong fundamentals, diversified oil and logistics infrastructure,” but warned “the outlook remains highly uncertain, with risks to the downside.” Still, Riyadh should get a windfall from higher oil prices offsetting lower export volumes, the IMF said.
