Saudi Arabia's economy continues to demonstrate resilience amid regional conflict, drawing businesses from across the Gulf. Food-tech entrepreneur Sara Amini, based in Dubai, noted that Riyadh remains a hub of activity with full restaurants and expansion plans, unlike other Gulf states affected by the Iran war. Her AI platform for food distribution digitization benefits from this stability.
Non-Oil Sector Growth
A May survey revealed Saudi Arabia's non-oil private sector expanded at the fastest pace in three months, driven by improved domestic demand and stabilized supply chains. Riyad Bank's chief economist Naif Al-Ghaith attributed this to stronger output and new orders, including restarted projects. Walid Hayeck of FundRock ManCo Saudi observed increased demand for fund establishment and capital repatriation from other GCC states, citing a flight to safety.
Vision 2030 Alignment
The war aligns with Saudi Arabia's Vision 2030 diversification strategy, with the 2026-2030 plan focusing on tourism, industry, AI, and logistics, largely funded by the Public Investment Fund (PIF). Analyst Justin Alexander noted that the PIF was already recalibrating investments, and the conflict accelerated this shift. Local firms like Sirdab, a Riyadh-based tech platform for on-demand storage and transport, have seen surging demand since the war began, with daily calls from customers clearing containers from Red Sea ports.
Tourism and Hospitality
Tourist numbers rose 8% year-on-year in Q1 2026 to 37.2 million, driven by domestic travel offsetting a 13% drop in inbound visitors. Hotel occupancy averaged 66.3% from January to March, up three percentage points, while Dubai's occupancy is projected to drop to 10% in Q2. Red Sea resorts are particularly popular among Saudi residents seeking safer breaks.
Economic Resilience
Despite Iranian drone and missile attacks hitting oil infrastructure and closing the Strait of Hormuz, Saudi Aramco's CEO Amin Nasser highlighted the rerouting of crude to Red Sea ports as a critical lifeline. While export volumes are down, higher oil prices help offset losses, and the outlook is improving. A Finance Ministry spokesperson attributed the wider deficit to temporary cashflow lags and accelerated conflict-mitigation investments.
