IMF Predicts Saudi GDP Shrinkage Amid Houthi Attacks

The International Monetary Fund predicts that Saudi Arabia will see its GDP shrink by 3.3 percent this year. This economic contraction results from a broader Middle East war, lethal Houthi attacks on Saudi infrastructure, and an Iranian blockade of the Strait of Hormuz that began after U.S. and Israeli strikes on Iran in February.

Houthi forces have targeted Saudi oil facilities, Red Sea tankers, and transport hubs. On Saturday, a series of strikes on Riyadh's international airport killed 13 people. In response, U.S. President Donald Trump stated he is considering joining Saudi strikes against the Houthis. The Houthis warned that any U.S. intervention would result in attacks on American interests in the region.

Saudi Arabia attempted to mitigate the impact of the Strait of Hormuz blockade by using its East-West oil pipeline. However, that route was temporarily disabled in September following strikes by Iran-backed groups in Iraq.