Fitch Sees Saudi Arabia Growth Slowing to 0.6% in 2026 as Hormuz Disruption Persists
Updated
Updated · IndexBox, Inc. · Jul 11
Fitch Sees Saudi Arabia Growth Slowing to 0.6% in 2026 as Hormuz Disruption Persists
2 articles · Updated · IndexBox, Inc. · Jul 11
Summary
Saudi Arabia’s GDP is forecast to slow to 0.6% in 2026, with Fitch saying renewed Strait of Hormuz disruption from the US-Iran war will curb trade and petrochemical exports.
Fitch still affirmed the kingdom’s A+ long-term foreign-currency rating, citing resilient economic fundamentals, strong fiscal buffers and Saudi Arabia’s ability to raise oil output once the waterway reopens.
Non-oil growth is expected to take a hit while the strait remains constrained, though Fitch said stronger consumer spending, steadier PIF outlays and gradual megaproject rollouts should offset part of the drag.
Growth is then projected to rebound as shipping normalizes—reaching 5.5% in 2027 by the IMF’s estimate before easing to 2.9% in 2028 in Fitch’s outlook.
Fitch warned the short-term outlook still hinges on regional security, saying further US or Israeli strikes on Iran remain highly probable and could again threaten Saudi oil and gas exports.
Saudi Arabia's 'A+' rating masks a stalling economy. Can domestic spending truly offset the catastrophic impact of the Hormuz closure?
The Hormuz blockade has sent commodity prices soaring. What is the international strategy to reopen this vital economic artery?
As NEOM's 'THE LINE' is suspended, is Saudi Arabia's post-oil dream the first major casualty of the US-Iran war?
Saudi Arabia’s 2026 Economy Under Pressure: US-Iran Tensions, Hormuz Disruption, and Fiscal Strain
Overview
Saudi Arabia’s 2026 economic outlook has sharply deteriorated due to the escalating US-Iran conflict, which has created a new geopolitical reality with serious consequences for regional stability and global energy markets. This conflict has put the entire Gulf region under economic pressure, but Saudi Arabia is especially affected. The war has exposed the vulnerability of Saudi energy infrastructure to low-cost missile and drone attacks, leading to high economic costs and disruptions in oil exports. Despite efforts to restore energy flows and use alternative routes, the risks remain high, making the Kingdom’s economic future much more uncertain.