Economic growth targets in Saudi Arabia dealt a blow by attacks
Disruptions in the Strait of Hormuz and attacks on critical airports negatively impacted Saudi Arabia's economic diversification moves and oil exports.
Saudi Arabia's economic growth and diversification initiatives suffered a severe blow due to disruptions in the Strait of Hormuz and airport attacks. Following an attack on the airport in Riyadh resulting in casualties, the stock market saw a decline, and contraction expectations for 2026 were shared.
Airport attacks and security crises
As a result of Houthi attacks targeting King Khalid International Airport in Riyadh, at least 12 people lost their lives and over 300 were injured. This situation has brought security concerns to the center of the economic recovery.
Sharp drop in the stock market and share losses
Declines in the Saudi stock market's benchmark index TASI continued, pulling the market down to its lowest level of the year. Shares of Saudi National Bank, one of the country's major banks, and energy giant Saudi Aramco also recorded sharp declines during this process.
Drop in oil production and exports
The East-West oil pipeline going out of service following the attacks weakened the safety valve. Saudi oil production dropped from 10.9 million barrels per day in February to 6.2 million barrels in August.
Impacts on investor confidence and tourism
Flight disruptions, travel warnings, and rising insurance costs are limiting business mobility. While these developments mean a loss for tourism, they can cause companies to postpone investment decisions.
Growth and contraction forecasts for 2026
The Arab Gulf States Institute estimated that the country's real gross domestic product could contract by 6.5 percent in 2026. This is based on expectations of a negative outlook in oil production and weakening non-oil growth.