Abdullah Al Alami*
October 3, 2025
Saudi Arabia released the
Pre-Budget Statement for Fiscal Year 2026, with total expenditure estimated at SR1,313
billion and revenues at SR1,147 billion, resulting in a deficit of 3.3 percent
of GDP. In 2028, total expenditures are expected to reach about SR1,419 billion, and total revenues are expected to reach about
SR1,294 billion.
Expenditure
The government continues its expansionary spending approach, focusing on national priorities with social and
economic impact to diversify the
economy. The Saudi Government is committed to maintaining development, including targeted spending. However, the private sector needs to be an effective partner in development to
achieve a balance between development requirements and financial
sustainability.
GDP
The ratio of public debt
to GDP is still at relatively low levels compared to many other economies. Nevertheless,
it is within safe limits compared to the size of the economy. The Kingdom continues
to develop its fiscal policies to balance the requirements of growth and
sustainability. This is supported by financial reserves, while maintaining
flexibility to intervene in the event of emergency needs.
Saudi GDP is projected to
grow 4.4%, with non-oil activities increasing by around 5% by the end of 2025. This is due to the continued growth of domestic demand
and the improvement of employment levels, which led to a reduction in the
unemployment rate among Saudis to a record level of 6.8% in the second quarter of 2025.
Reforms
Riyadh is committed to ensuring
that reforms are moving forward to enhance economic efficiency and
sustainability. Accordingly, the Saudi economy has undergone structural reforms that
improved the business environment, strengthened the role of the private sector,
and supported progress toward the achievement of development
goals.
Non-oil
The positive
performance of non-oil activities and the continued implementation of
supporting initiatives led to positive developments in revenues. For example, the Saudi Government accelerated the implementation of several programs to provide financial flexibility to achieve tangible
gains. This had enabled the government to enhance its ability
to respond to developments and adopt a good fiscal policy. The purpose is to continue non-oil activities through the issuance of bonds, sukuk, and loans, in addition to expanding alternative funding via infrastructure
financing.
2026 Budget
The Saudi 2026 budget aims to
consolidate the strength of the Kingdom's financial position and ensure the
sustainability of public finances, in parallel with supporting economic growth. Preliminary estimates for the year 2026 project real
Saudi GDP growth of about 4.6%, driven by the expected expansion of non-oil
activities. Considering the continued global uncertainty during 2026 and the possibility of continued geopolitical
tensions, Riyadh continues to monitor
and analyze all possible risks while addressing potential global economic challenges to reduce their negative impacts.
The Pre-Budget
Statement is part of the
Kingdom's ongoing efforts to be more transparent in public finance
and enhance fiscal disclosure. It also reflects the government's efforts to continue the implementation of reforms to strengthen its
fiscal position, considering the challenges in the global economy.
*Saudi writer
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