Saudi Arabia’s Pre-Budget Statement for 2026: Key Insights

Saudi Arabia’s Ministry of Finance has recently released its Pre-Budget Statement for the fiscal year 2026, outlining significant financial projections and strategies. The anticipated total expenditure is approximately SR1.313 trillion (around $350 billion), while total revenue is expected to reach SR1.147 trillion (about $305 billion). This results in a projected budget deficit of 3.3% of GDP.

Commitment to Expansionary Fiscal Policies

The Saudi government has reaffirmed its commitment to maintaining expansionary fiscal policies that align with national priorities. These policies are designed to have a substantial social and economic impact, in line with the ambitious goals set forth in Saudi Vision 2030. The focus is on fostering economic diversification, promoting long-term growth, and ensuring sustainability, all while remaining adaptable to both global and domestic challenges.

Economic Growth Projections

Since the inception of Vision 2030, the Saudi economy has experienced significant structural reforms. These reforms have not only improved the business environment but have also bolstered the private sector and advanced the Sustainable Development Goals. Preliminary forecasts for 2026 indicate a real GDP growth of 4.6%, primarily driven by the expansion of non-oil sectors.

Revenue and Expenditure Trends

The Ministry projects that revenues will increase from SR1.147 trillion in 2026 to SR1.294 trillion (approximately $344 billion) by 2028. Concurrently, expenditures are expected to rise from SR1.313 trillion in 2026 to SR1.419 trillion (around $377 billion) in 2028. This upward trend in both revenue and expenditure reflects the government’s ongoing commitment to accelerating national programs and projects, which have already yielded tangible benefits.

Managing Budget Deficits

While the statement indicates that budget deficits are likely to persist in the medium term, they are expected to be at lower levels than those projected for 2026. This is indicative of the government’s strategy to balance expansionary spending with fiscal sustainability. For the year 2025, real GDP growth is forecasted at 4.4%, supported by a 5% increase in non-oil activities. The rise in domestic demand and improved employment rates have contributed to a notable decrease in unemployment, which has reached a record low of 6.8% in the second quarter of 2025.

Financing the Budget

To finance the budget, the Saudi government plans to leverage both local and international funding avenues. This includes the issuance of bonds, sukuk, and loans, as well as exploring alternative funding sources such as project finance, infrastructure financing, and support from export credit agencies.

Ministerial Insights

Minister of Finance Mohammed Aljadaan emphasized that the 2026 budget aims to strengthen the Kingdom’s financial position while simultaneously supporting economic growth. He noted that Saudi Arabia’s public debt-to-GDP ratio remains low and within safe limits, bolstered by robust financial reserves. This financial stability provides the government with the flexibility to respond effectively to economic shocks or crises.

Aljadaan also highlighted the importance of monitoring global uncertainties, particularly in light of potential geopolitical tensions and evolving preventive policies. He stated that the government is committed to enhancing the efficiency of financial planning and proactively guiding policies to mitigate potential global economic challenges.

Ongoing Development Initiatives

The government plans to continue its development projects and national strategies with targeted spending aimed at delivering both economic and social returns. Encouraging private sector participation remains a priority, as it is essential for sustainable growth.

Commitment to Transparency

The release of the Pre-Budget Statement marks the eighth consecutive year of this initiative, reflecting Saudi Arabia’s dedication to transparency and fiscal disclosure. It underscores the government’s efforts to implement reforms that have fortified the Kingdom’s fiscal position amid ongoing global economic uncertainties.

In summary, the Pre-Budget Statement for 2026 outlines a strategic approach to fiscal management, emphasizing growth, sustainability, and transparency as the Kingdom navigates a complex economic landscape.