Saudi Economy Faces Contraction, Fiscal Risks as Conflict Persists
Dow Jones
4 hours ago
0814 GMT - Saudi Arabia's economy is expected to contract 2.4% in 2026 after expanding 4.6% last year, as disruption to oil production and weaker non-oil growth weigh on activity, Citi Research says. The bank forecasts a 16.7% decline in oil-sector output, while non-oil growth slows to 1.9% from 5.1%. Although alternative crude-export routes have partly shielded the kingdom from the Strait of Hormuz disruption, Citi warns that a widening fiscal deficit could constrain private-sector borrowing if the government relies heavily on domestic financing. Escalating tensions with the Iran-backed Houthi militia add to the downside risks, it says.
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