Houthi strikes against Saudi Arabia are exerting merely a "limited" financial effect on the kingdom to date, thanks to strong domestic demand, the IMF's regional director informed AFP, although geopolitical instability continues to pose a threat.

The Iran-aligned Yemeni force has escalated its strikes on Saudi Arabia in recent weeks, striking petroleum installations and aviation hubs among other sites, as Yemen's inactive internal conflict has reignited.

As the globe's foremost oil exporter, Saudi Arabia has seen its crude shipments constrained by Iran's blockade of the Strait of Hormuz and the Houthis' announcement of a naval blockade.

However, maritime shipments persist in moving despite the hostilities, Jihad Azour stated to AFP.

The Gulf monarchy additionally benefits from "strong internal demand and a robust public sector, so the impact is limited", he noted regarding the Houthi assaults.

Nonetheless, the nation's economy is anticipated to shrink by 3.3 percent this year, driven by the fallout from the US-Israeli conflict with Iran that commenced in February.

In its regional assessment published on Thursday, the IMF indicated that every Gulf country with the exception of Oman had experienced drops in its hydrocarbon output.

The collective economy of the region is projected to contract by 4.8 percent in 2026.

Even so, the IMF anticipates a sharp recovery of approximately 9.1 percent growth the following year, albeit accompanied by profound uncertainty surrounding persistent geopolitical friction and frozen diplomatic talks between Washington and Tehran.

On Thursday, Iran's Revolutionary Guards warned they would broaden the conflict should the US armed forces persist in escorting maritime vessels through the Strait of Hormuz.

Reports have also emerged in American and international media suggesting that Washington and Israel are gearing up for a fresh round of strikes against Iran, potentially following the US midterm elections on November 3.

Should hostilities reignite and inflict additional harm on infrastructure, Azour cautioned, "the cost will be higher".

"Our projections are based on an oil price that will remain stable, higher than it was before the war, but much lower than it would be if the region were to flare up or the conflict were to become more intense," he warned.

"On the ability to attract investment and talent, everything will depend on stability," he observed.

Azour added that "scars will remain for a few years" as a result of the war, but affirmed that "the fundamentals of the Saudi economy are strong".