Saudi Arabia’s real gross domestic product contracted by 4.8% year-on-year in the second quarter, according to preliminary estimates from the General Authority for Statistics (GASTAT), as escalating Middle East hostilities weigh heavily on the region’s leading oil producer.
The downturn was primarily driven by a 24.7% drop in oil activity, which subtracted 5.4 percentage points from overall GDP growth. In contrast, non-oil and government sectors expanded modestly, rising 0.9% and 0.6% respectively, with non-oil activities contributing a positive 0.4 percentage points.
The figures highlight the economic fallout from the five-month conflict—recently intensified by U.S. strikes on Iran—which continues to disrupt shipping routes and regional energy markets. Analyst surveys indicate that most Gulf economies face sharper growth slowdowns this year than initially projected, before a potential recovery in 2027.
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