ALBAWABA- Saudi Arabia’s Cabinet, chaired by Crown Prince Mohammed bin Salman, has approved the kingdom’s 2026 national budget, projecting revenues of SR1.147 trillion ($306 billion) and expenditures of SR1.313 trillion ($350 billion), resulting in a SR166 billion ($44 billion) deficit—about 3.3% of GDP.
Saudi Finance Minister Mohammed Al-Jadaan described the shortfall as “a deficit by design,” emphasizing that the government intends to maintain strong investment in non-oil sectors such as industry, tourism, logistics, and technology to accelerate the Vision 2030 transformation while preserving debt sustainability and sufficient reserve levels.
The budget forecasts GDP growth of 4.6%, driven by a 5% expansion in the non-oil economy. It allocates SR260 billion ($69 billion) to health and social development and SR201 billion ($54 billion) to education, underscoring a continued commitment to human-capital development. Oil revenues are projected at SR758 billion ($202 billion).
At the same time, non-oil income, supported by taxes, fees, and expanding private-sector activity, is expected to make up 41% of total revenues, up from 40% in 2025. Public debt is set to reach SR1.300 trillion (29.9% of GDP) by year-end, financed through controlled borrowing to support major infrastructure projects without straining state finances.
The 2026 budget adopts a slightly more cautious stance than the 2025 plan amid weaker oil prices and ongoing production cuts. Revenues are expected to fall 3.2% from SR1.184 trillion to SR1.147 trillion, mainly due to softer hydrocarbon income, while non-oil revenues remain stable at about SR472 billion ($126 billion).
Expenditures increased 2.2% from SR1.285 trillion to SR1.313 trillion, though actual 2025 spending rose above SR1.34 trillion due to overruns. The fiscal deficit is projected to narrow from SR245 billion (5.3% of GDP) in 2025 to SR166 billion in 2026, a 32% reduction attributed to tighter spending controls and broader revenue diversification.
The Saudi government says the budget positions the kingdom to balance short-term fiscal pressures with long-term structural reforms, even as global oil markets remain volatile.
