As a Result of the Repercussions of the Navigation Disruption and the Escalation… The IMF Expects the Saudi Economy to Contract During 2026

The International Monetary Fund expected on Sunday the contraction of the Saudi economy by 3.3% during the current year, in light of the repercussions of the disruption of navigation movement in the Strait of Hormuz, and what resulted from the escalation between Saudi Arabia and the Sana’a forces, including the maritime ban on the Kingdom’s ships in the Bab Al-Mandeb Strait, and attacks that hit vital and important facilities.

Exclusive Follow-ups — Al-Khabar Al-Yemeni:

The Fund attributed, in a report of its, the expected decline to the repercussions of the regional conflict, especially the disruption of shipping movement through the Strait of Hormuz, which represents a major passage for oil and gas exports, and the resulting disruptions in the energy and trade markets.

The Fund noted that the economies of the Middle East and Central Asia region face a contraction during the current year, after previous expectations indicated achieving economic growth, in a shift that reflects the magnitude of the repercussions resulting from the war and the disruption of energy supplies.

To limit the effects of the closure of the strait, Saudi Arabia resorted to diverting part of its oil exports through the “East-West” pipeline, which transports crude to the Red Sea coast, bypassing the Strait of Hormuz.

However, the pipeline being subjected to attacks and disruptions during last September raised fears regarding the continuity of alternative oil export routes, in conjunction with the renewal of the military escalation between Saudi Arabia and Sana’a and the latter’s imposition of a maritime ban on the Kingdom.

These expectations come at a time when Saudi Arabia faces the repercussions of the military escalation in the region, including the attacks carried out by the Sana’a forces targeting its territory, amid increasing risks to the energy infrastructure and the movement of trade and investment.

The IMF linked the recovery prospects during the year 2027 to the extent of the improvement of the regional conditions and the return of navigation movement to normal, warning that the continuation of the disruptions for a longer period may exacerbate the economic pressures.