IMF Says Saudi Economy Withstands Hormuz Disruption, Sees About 2% Growth in 2026
Updated
Updated · Arab News Pakistan · Jun 3
IMF Says Saudi Economy Withstands Hormuz Disruption, Sees About 2% Growth in 2026
3 articles · Updated · Arab News Pakistan · Jun 3
Summary
Saudi Arabia is weathering the Middle East conflict better than expected, with the IMF saying the economy remains resilient and should still grow around 2% in 2026 if Strait of Hormuz shipping normalizes in coming months.
4.5% GDP growth in 2025, inflation below 2% entering 2026, low public debt, ample reserves and a large sovereign wealth fund gave the kingdom buffers before the shock hit.
East-West pipeline rerouting, Red Sea ports and Aramco overseas inventories helped keep oil deliveries moving after maritime traffic through the strait was curtailed, while non-oil activity stabilized in April after a likely March contraction.
The IMF said lower oil output may still weigh on growth, though higher prices should offset part of the hit, and it kept a stronger 4.5% growth view for 2027 as energy output and transport normalize.
Vision 2030 reforms, a more selective Public Investment Fund strategy and further steps on private-sector growth, capital markets, SMEs and AI are seen as key to sustaining medium-term expansion.
With the UAE exiting OPEC, can Saudi Arabia's Vision 2030 survive a potential post-war oil price collapse?
Is Saudi Arabia's economic diversification real or a temporary shield built from high, conflict-driven oil prices?
As Riyadh pivots to become a global AI hub, what are the hidden risks to its ambitious post-oil economic strategy?
Saudi Arabia’s 2026 Growth: How Vision 2030 and Alternative Routes Sustained the Economy During the Gulf Crisis
Overview
In 2026, Saudi Arabia's economy showed remarkable resilience and moderate growth despite severe regional disruptions and escalating tensions. The Kingdom managed to maintain clear signs of strength, with robust performance in key areas such as the Purchasing Managers' Index, oil activities, labor market, and equity markets by late May. While the Gulf region faced greater economic impact from the crisis, Saudi Arabia demonstrated a notable capacity for resilience, even amid the unprecedented closure of the Strait of Hormuz. This strong performance highlights how Saudi Arabia sustained its economic momentum during a challenging and crisis-ridden period.