Saudi Arabia Approves 2026 Budget, Deficit Narrows

Saudi Arabia has approved its 2026 state budget, projecting total spending of SAR 1,313 billion against revenues of SAR 1,147 billion, leaving a deficit of SAR 165 billion, or about 3.3% of GDP. The budget was approved by the Council of Ministers on 2 December 2025 during a Cabinet session held in Dammam.

The projected shortfall marks a notable improvement on 2025, when the deficit was estimated at SAR 245 billion, or around 5.3% of GDP. The narrowing gap reflects continued momentum in non-oil activity even as the government maintains what officials describe as an expansionary and countercyclical fiscal approach tied to national priorities.

Where the money is going

Spending in 2026 focuses on developing national industry and expanding logistics services, with the stated aim of positioning the Kingdom as a leading industrial power and a global logistics hub. The budget also directs support toward non-oil growth sectors such as tourism and technology, deepening private-sector participation and reducing reliance on oil revenues.

Preliminary estimates put real GDP growth for 2026 at about 4.6%, driven mainly by non-oil activities. Over the recent four-to-five-year period, non-oil growth has averaged around 5%, and non-oil activities now account for roughly 55.4% of the economy, in line with the diversification targets of Vision 2030.

Officials describe the 2026 budget as the start of a "third phase" of the long-term economic transformation, shifting emphasis away from launching new megaprojects toward consolidating and scaling existing industrial, logistics and non-oil initiatives.

For residents and businesses, the budget signals steady public investment in sectors that support jobs and private enterprise. The statement sets aggregate fiscal totals and sectoral priorities rather than detailing any new fees or changes to government service procedures.

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