Saudi economy contracts 4.8% in Q2 2026 amid U.S.-Iran tensions
Saudi Arabia just saw its biggest economic drop since the COVID-19 pandemic, with the economy contracting by 4.8% in the second quarter of 2026.
The main reasons? Ongoing U.S.-Iran tensions and a cutback in oil production.
That's a big shift from earlier this year, when things were actually growing by 3%.
Saudi oil sector plunges 24.7%
The oil industry, Saudi Arabia's economic powerhouse, fell a huge 24.7%, thanks to attacks on energy facilities and shipping routes by Iran-backed groups.
Even with oil prices above $90 per barrel, production hasn't bounced back.
Non-oil sectors barely moved, growing just 0.6%.
Economists say more regional trouble could make things even tougher.
IMF forecasts 1.7% Saudi GDP growth
Despite the rough patch, the IMF thinks Saudi GDP could grow by 1.7% this year, because of factors including Vision 2030 reforms and efforts to diversify beyond oil.