Saudi Arabia’s 2026 budget puts citizens first, growth ahead
https://arab.news/jqf65
The Saudi Ministry of Finance last week announced the Kingdom’s 2026 budget, outlining key economic and fiscal indicators, including the outlook for 2026 and the medium term, global economic trends, fiscal developments, and the main fiscal risks anticipated ahead.
The budget projects total revenues at SR1.147 trillion ($305.9 billion) and expenditures at SR1.313 trillion, resulting in a fiscal deficit of SR165 billion.
Despite this deficit, the government continues to put citizens, residents, and visitors at the center of its priorities, underscoring its commitment to welfare and the delivery of high-quality public services.
Importantly, the budget reiterates that ongoing reviews of spending priorities will not affect the quality of essential public services.
The government remains firmly committed to protecting them, reflecting its recognition that quality of life enhancements are a core pillar of the national transformation journey.
This year’s budget also reinforces the government’s commitment to implementing major projects aligned with Saudi Vision 2030, with an emphasis on spending efficiency and balanced development across all sectors and all 13 regions of the Kingdom.
Supporting the private sector remains a central priority. The government aims to strengthen the sector’s role as a primary engine of economic growth by fostering a competitive, attractive business environment that draws high-quality investments. It also reaffirms its pledge to settle private-sector dues promptly to sustain the sector’s crucial role in the Kingdom’s economic transformation.
Enhancing fiscal sustainability while supporting sustainable economic growth stands at the heart of the 2026 budget. The government continues to align spending priorities to ensure resources are directed toward programs and projects with the greatest economic and social impact, reinforcing long-term financial stability.
Saudi Arabia continues to manage its financial resources with prudence and efficiency, maintaining strong fiscal performance to support sustainable growth and preserve fiscal stability. Balanced economic and fiscal policies remain central to driving structural transformation and realizing the goals of Vision 2030.
Despite a sluggish global economy weighed down by geopolitical tensions and trade barriers, Saudi Arabia has maintained a strong fiscal position and pressed ahead with its development agenda. This resilience stems from effective fiscal policies that ensure readiness for global economic fluctuations.
Throughout 2025, the Saudi economy demonstrated robustness in the face of global challenges. Key economic indicators showed positive performance, reaffirming the success of Vision 2030 in building an integrated and dynamic economic system.
Saudi Arabia’s non-oil private sector PMI averaged 57.3 points from January to September 2025 — well above the neutral 50 threshold for more than four consecutive years — outperforming many global peers. This reflects proactive government policies aimed at empowering the private sector and creating a more competitive, investment-friendly environment.
Overall, despite lingering uncertainties in the global economy, the Kingdom continues to push forward with efforts to build a more sustainable economic model. These efforts rest on wide-ranging structural and fiscal reforms supported by strategic spending aligned with national priorities under Vision 2030, while maintaining spending efficiency and fiscal discipline.
Non-oil activities remain the key driver of economic growth. In 2024, they reached a record SR2.6 trillion — an annual increase of 5.2 percent — serving as the main engine of GDP expansion, with total GDP rising 2.8 percent during the same year.
From early 2025 through the third quarter, real GDP grew 4.1 percent compared to the previous year, driven entirely by non-oil activities, which expanded by 4.7 percent year-on-year, fueled by strong domestic demand, rising incomes, and higher employment.
Given the positive indicators throughout 2025, the Saudi economy is expected to maintain solid growth. Preliminary estimates point to real GDP growth of around 4.4 percent for 2025, supported by non-oil activities projected to expand by 5 percent amid continued momentum and broad-based economic expansion. Meanwhile, Saudi unemployment declined to 6.8 percent in Q2 2025 from 7.1 percent a year earlier, underscoring ongoing labor market improvements.
• Talat Zaki Hafiz is an economist and financial analyst.
X: @TalatHafiz

