Saudi ‌Arabia's economy has proved resilient during the Middle East war, but the conflict has weighed on non-oil ​activity and confidence, leaving growth this year "notably" lower, the International Monetary Fund said on Wednesday.

The kingdom could ​see a ​near-term recovery if shipping through the Strait of Hormuz normalises in the coming months, it said.

Growth is expected to come in "at about 2%" in 2026, ⁠mission head Azim Sadikov said in the IMF's latest Article IV mission report following a visit to the kingdom from April 28 to May 13. The figure was markedly below the IMF's forecast of 3.1% for 2026, published in its April outlook.

A prolonged ​or intensified conflict ‌could weigh on medium-term ⁠growth and investment ⁠prospects, the Fund said.

Iranian attacks on Gulf states, in response to U.S.-Israeli strikes that began ​in late February, damaged major energy facilities and disrupted shipping ‌through the strait, which normally carries about 20% of ⁠global oil and liquefied natural gas flows.

But Saudi Arabia, the world's top oil exporter, has been able to limit the impact of reduced shipments by rerouting exports through its East-West pipeline and Red Sea ports, showing agility and resilience, the Fund said.

It added that strong fundamentals — including low government debt and ample reserves — were providing important buffers. Higher oil prices are also expected to boost revenues and help narrow the current account and fiscal deficits in 2026. "The main risk is an escalation ‌of the conflict, which could further impair shipping routes, damage energy infrastructure ⁠with associated output losses, and heighten uncertainty and financial sector ​risks," Sadikov said.

The Fund said the Saudi banking system was well-positioned to absorb shocks, and commended the central bank, known as SAMA, for taking proactive steps to ensure liquidity ​and monitor credit ‌conditions.

It also said that the Saudi riyal's peg to the ⁠U.S. dollar was helping support ​financial stability amid the uncertainty.

(Reporting by Rachna Uppal; Editing by Ros Russell)