RIYADH: Saudi Arabia posted a budget deficit of SR34.3 billion ($9.14 billion) in the second quarter of 2026, bringing the Kingdom’s first-half shortfall to SR160 billion, according to the Ministry of Finance.
The second quarter deficit narrowed sharply from SR125.7 billion in the first three months of the year, as government revenues strengthened while spending remained elevated.
Total revenue increased 12 percent to SR338.8 billion, while government spending rose 11 percent to SR373 billion in the second quarter compared to the same period of the previous year.
Oil revenues accounted for SR185.1 billion of total receipts, while non-oil revenues stood at SR153.7 billion during the quarter.
For the first half, the government financed the entire SR160 billion deficit through borrowing, with no financing drawn from government reserves. Borrowing amounted to SR125.7 billion in the first quarter and SR34.3 billion in the second quarter.
Government spending on infrastructure and transportation rose 21 percent in the first half of 2026 compared with the same period a year earlier, while expenditure on health and social development increased 10 percent.
The latest figures come as Saudi Arabia continues to increase spending on major development and diversification projects while managing the impact of oil-market conditions on public finances.
According to the International Monetary Fund’s latest report, the Kingdom’s economy is expected to stay resilient amid geopolitical conflicts and is projected to grow by 1.7 percent this year before accelerating to 5.5 percent in 2027.
The IMF said that while the war in the Middle East and the near halt in shipping through the Strait of Hormuz have disrupted activity, curtailed trade, including oil exports, and dented confidence, the Kingdom’s economy is “showing agility and resilience, reflecting Saudi Arabia’s strong macroeconomic fundamentals and diversified oil and logistics infrastructure.”
Public sector pay up
The latest Ministry of Finance report showed that employees wages remained the largest spending category at SR144.3 billion in the second quarter of 2026, up 3 percent year on year.
Spending on goods and services increased 1 percent to SR74.28 billion, while financing expenses climbed 41 percent to SR16.8 billion.
Subsidies surged 73 percent to SR13.2 billion, grants jumped 199 percent to SR1.24 billion, social benefits rose 8 percent to SR42.5 billion, other expenses increased 49 percent to SR34.4 billion, and non-financial assets spending grew 16 percent to SR46.2 billion.
