Saudi Arabia forecasts deficit of $44 billion in 2026 budget

RIYADH: Saudi Arabia approved the kingdom’s budget for 2026 with an estimated deficit of 165 billion riyals ($44 billion), the Saudi state news agency reported on Tuesday.

The world’s top oil exporter is more than halfway through its Vision 2030 economic transformation blueprint introduced by de facto ruler Crown Prince Mohammed bin Salman in 2016.

The budget set the kingdom’s total spending at 1.31 trillion riyals, with total revenues projected at 1.15 trillion riyals.

The Crown Prince said after the budget’s approval that the economic transformation since Vision 2030 was launched improved the growth of non-oil activities and boosted the role of the private sector in the kingdom, the state news agency cited him as saying.

The Arab world’s largest economy is overseeing a major push to slash its dependence on oil revenues, with officials pouring billions into projects to attract investment and tourism.

The projected deficit amounts to 3.3 percent of GDP, which is lower than the deficit of 245 billion riyals estimated for 2025, which is equivalent to 5.3 percent of GDP, according to the finance ministry.

Ahead of the budget, the kingdom’s finance minister Mohammed al-Jadaan defended the government’s latest fiscal plan.

“The current level of deficit is a policy choice,” the minister said in response to a question from AFP, during a briefing before the publication of the budget.

“We need to invest in our economy and so long as the return from these investments is higher than the cost of the debt, we will continue that drive.”

The budget figures will be keenly watched by energy industry experts, with the hopes of gleaning insights into where Saudi Arabia expects oil revenues to head in the near future.

The kingdom’s revenues are still heavily dependent on its petroleum exports.

Continued global economic uncertainty and a glut in supply has weighed on the market throughout most of the year, resulting in lower oil prices.

Crude oil prices have hovered in the $60 to $70 per-barrel range in the US and international markets, down by about $10 from the 2024 period.

Geopolitical issues, including US sanctions targeting Russian energy companies last month, have helped keep prices from sliding further.