Saudi Arabia's economy contracted by 4.8 percent year-on-year in the second quarter of 2026, compared with growth of 3 percent in the first quarter, marking its first annual contraction in two and a half years.

According to the Financial Times, citing preliminary data released Thursday by Saudi Arabia's General Authority for Statistics, the contraction was driven primarily by the oil sector, which declined by 24.7 percent.

The newspaper said the decline in real gross domestic product during the second quarter was the sharpest quarterly contraction since the COVID-19 pandemic and the first in approximately two and a half years. It attributed the downturn to regional tensions and lower oil production.

The figures come amid the Yemeni Armed Forces' implementation of the "siege for siege" equation and their broader escalation in response to Saudi policies toward Yemen, including the enforcement of maritime restrictions on Saudi-linked shipping in the Red Sea and Bab al-Mandab.

Yemeni officials have described the maritime measures as an economic deterrence strategy aimed at increasing the cost of the Saudi blockade on Yemen and compelling Riyadh to end its military campaign and restrictions on Yemeni ports and airports.