Oil Shockwaves: Middle East Conflict Sinks Saudi GDP

Saudi Arabia's GDP fell 4.8% in the second quarter due to a 24.7% decline in oil activity. The ongoing Middle East conflict has disrupted energy markets, impacting economies across the Gulf. Experts predict further contractions this year, with a potential economic recovery by 2027.

Saudi Arabia's economy has faced a significant setback with its real gross domestic product dropping 4.8% in the second quarter, according to preliminary figures from the General Authority for Statistics (GASTAT).

The decline was primarily driven by a substantial 24.7% fall in oil activity, linked to the ongoing conflict in the Middle East. The situation was exacerbated when the U.S. launched an attack on Iran, disrupting shipping and energy markets.

The ripple effects across the Gulf region have led economists to predict sharper economic contractions, with recovery anticipated only by 2027, as indicated by a recent Reuters poll.