iCloud backup failed due to not enough iCloud storage available

Hi all,

My iPhone X with iOS 16.7.2 failed to backup with iCloud. It said there is not enough space available. I checked my iCloud storage and it's only 2.6MB used out of 5GB. Tried to switch off all apps for backup except "Contacts" and "Health". Not sure if the free 5GB is not enough for the basic system backup or there is another issue causing this.

Thanks and appreciated with any suggestion for troubleshooting.