Saudi Arabia’s economy contracted by 3.8% year-on-year in the third quarter of 2026, following a 4.7% decline in the previous quarter, according to preliminary estimates. This marked the second consecutive quarter of economic downturn, driven primarily by a sharp 20.4% drop in oil-related activities, after a steeper 24.8% fall in Q2. The slump in the oil sector was largely attributed to the ongoing Middle East conflict, which disrupted shipping through the Strait of Hormuz. Government activities also decreased by 2.7%, reversing a 0.9% increase recorded in the second quarter. These declines were partially offset by a stronger performance in the non-oil sector, where activities expanded by 1.9%, accelerating from 0.8% growth in Q2.