JEDDAH: Saudi Arabia has projected a fiscal deficit equivalent to 3.6 percent ‌of ‌gross domestic ‌product ⁠in 2027, with total expenditure ⁠estimated at SR1.39 trillion ⁠ ($370.21 billion) ‌and ‌revenue projected ‌at ‌SR1.20 trillion, the ‌Finance Ministry said in ⁠a ⁠pre-budget statement on Wednesday.

The pre-budget statement reflects the Kingdom’s commitment to funding development priorities while maintaining fiscal sustainability.

The statement projected revenues to increase to SR1.351 trillion by 2029, while expenditure is expected to reach SR1.544 trillion over the same period.

The government attributed the resilience of the non-oil economy to reforms introduced since the launch of Vision 2030, which have helped diversify economic activity, improve the business environment and expand the private sector’s contribution to growth.

Non-oil revenues rose from SR166 billion in 2015 to SR505 billion in 2025, strengthening the stability and sustainability of public finances, the statement said.

However, economic and geopolitical developments in 2026 have weighed on the Kingdom’s growth outlook, with preliminary estimates indicating a 3.6 percent contraction in real gross domestic product, largely driven by a projected 21.8 percent decline in oil activities.

Non-oil activities are expected to continue expanding, with growth estimated at 3.2 percent, helping offset the impact of weaker oil-sector performance.

The statement also reported that non-oil activities grew by 1.8 percent in the first half of 2026, lifting their contribution to GDP to a record 57.3 percent. Inflation is projected at around 2.1 percent for the year, while unemployment among Saudi nationals declined to 6.5 percent in the second quarter.

The ministry projects real GDP growth of 12.8 percent in 2027. Inflation is expected to remain stable over the period, easing from 2.1 percent in 2026 to 1.9 percent annually between 2027 and 2029.

Finance Minister Mohammed Al-Jadaan said the 2027 budget estimates should be viewed against a global backdrop of continued uncertainty and accelerating geopolitical developments.

He said the Kingdom would continue managing public finances with a long-term perspective, preserving its capacity to respond to external shocks while maintaining spending on development and strategic priorities.

“The Saudi government continues to monitor economic and geopolitical developments and assess their potential repercussions on the global economy, supply chains, and energy markets. And we will respond to these factors with flexible and proactive policies that support the economy and enhance its ability to continue achieving the goals of Saudi Vision 2030,” Aljadaan said.

He added that economic transformation plans would continue to focus on supporting growth, broadening the economic base and expanding non-oil revenues to secure more stable and sustainable income over the medium and long term.

The minister said the projected deficit reflected a fiscal approach designed to preserve the Kingdom’s financial position, support growth and provide flexibility to manage crises and unexpected spending needs while maintaining sustainable debt levels and substantial financial reserves.

Saudi Arabia also plans to continue borrowing in domestic and international markets in 2027, in line with its medium-term debt strategy. Financing will include bonds, sukuk and loans, alongside alternative funding channels such as project and infrastructure financing and export credit agencies.

The ministry said publishing preliminary budget estimates was part of the government’s efforts to strengthen transparency and fiscal disclosure, keeping citizens, investors and other stakeholders informed about economic developments and public finance projections.