Saudi Arabia GDP contracts 4.8% amid Red Sea blockade

Saudi Arabia's real GDP has recorded a 4.8% contraction, marking its largest decline since the coronavirus pandemic. This economic downturn is attributed to a structural crisis caused by naval confrontations and a blockade in the Red Sea.

The disruption has led to a significant drop in Saudi oil production, reaching its lowest levels in decades. The blockade has paralyzed exports, increased marine insurance prices, and forced the cancellation of oil shipments to international markets. These logistical challenges are eroding oil revenues, which are essential for the Kingdom's general budget and economic diversification programs.