Saudi Arabia approved its 2026 national budget with a deliberate deficit meant to keep big investments flowing into its economic overhaul, even as softer oil prices pressure government income.
The kingdom framed the shortfall as a strategic move to keep life in key sectors that Crown Prince Mohammed bin Salman sees as the spine of the Vision 2030 shift.
A Budget Built to Withstand Oil Market Pressure
Saudi officials sounded calm, almost confident, as they laid out the new numbers. Revenues are projected at SR1.147 trillion, while expenditures sit higher at SR1.313 trillion. That gap — SR166 billion — is a clear reminder that Riyadh isn’t shying away from spending, even with crude prices wobbling.
The finance minister, Mohammed Al-Jadaan, called it a “deficit by design.”
He really leaned on that phrase during his briefing.
The budget leans heavily on non-oil areas that Saudi leaders have repeatedly highlighted over the last several years: tourism, logistics, technology, and local industry. These areas are expected to keep the non-oil economy growing at about 5%.
A single sentence from Al-Jadaan summed up the mood: the government wants to spend without blowing up reserves or taking on risky debt.
Human Development Gets a Big Share
Education and healthcare continue to take giant portions of the pie.
SR260 billion is going to health and social development. SR201 billion is allocated to education.
That’s one of the few parts of the document that feels almost unchanged from past years — a steady investment line that Saudi leaders insist is key to raising living standards and supporting young Saudis.
One sentence released by state media quoted the Crown Prince saying the 2026 budget “affirms that the welfare of citizens remains the top priority.” Nothing surprising there, but the emphasis was strong.
Oil revenue still matters, of course. It is projected at SR758 billion.
But the kingdom says the real long-term strength lies somewhere beyond crude, even if it takes much longer to get there.
Non-Oil Revenues Grow, But Oil Still Dominates
Non-oil revenue is expected to make up 41% of total government income this year. It was 40% last year. It’s a slow climb, like watching sand shift in a desert breeze — but it’s moving.
Taxes and fees continue to carry part of that weight. Private-sector activity fills in the rest.
Public debt will reach SR1.300 trillion by the end of the year. That equals 29.9% of GDP, which is low compared with many countries, though higher than where Saudi Arabia stood before Vision 2030 kicked into gear.
One sentence to highlight the stakes: the government insists the borrowing is controlled, predictable, and mostly tied to major infrastructure projects that need multi-year spending.
A More Cautious Tone Compared to Last Year
Forecasts for 2026 signal a slightly slower pace. Revenues fall 3.2% from the previous year’s plan, largely due to oil prices being under pressure and ongoing production cuts.
Non-oil revenues stay mostly unchanged at SR472 billion.
GDP growth is forecast at 4.6% — healthy, but still dependent on whether global markets behave. Economists have pointed out that the non-oil economy is doing the heavy lifting now. That’s something Riyadh has been hoping for.
Expenditures increased 2.2% from the previous year, though the full figure wasn’t included in the initial release shared publicly.
Spending Priorities Shift as Vision 2030 Hits New Phase
This section shows where the government is actually putting its money.
Here’s a useful breakdown for readers:
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Health and social development get the biggest boost, reflecting concerns about rising service needs.
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Education retains its large share, especially with major curriculum reforms underway.
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Infrastructure projects — rail, logistics hubs, and new cities — continue pulling investment.
Typically, these categories give hints about political priorities. And honestly, this year they say the same thing Saudi officials have said for nearly a decade: growth beyond oil is the north star, even if the sky gets cloudy.
Major Allocations at a Glance
Below is a simple table summarizing the key figures referenced in the budget:
| Category | Amount (SR) | Notes |
|---|---|---|
| Total Revenues | 1.147 trillion | Lower due to weaker oil income |
| Total Expenditures | 1.313 trillion | Spending rises 2.2% |
| Deficit | 166 billion | About 3.3% of GDP |
| Oil Revenues | 758 billion | Dependent on production levels |
| Non-Oil Revenues | 472 billion | Supported by taxes and fees |
| Health & Social Development | 260 billion | Major social investment |
| Education | 201 billion | Continues heavy funding |
This table helps highlight just how strongly the budget leans toward long-term development spending despite the deficit.
A Push to Maintain Momentum Despite Global Uncertainty
One of the smallest but clearest paragraphs in the whole document says the budget aims to balance immediate needs with future commitments. Just one line — but it carries a lot of weight.
Oil markets can shift suddenly. Production cuts can change overnight.
And global demand is unpredictable.
Yet Saudi Arabia is staying on its current path, even if the path is expensive.
Analysts say the government appears ready to accept controlled deficits for several years rather than slow down major projects like NEOM, Qiddiya, or the massive logistics hubs planned around the kingdom.
Some observers noted that the tone this year feels more grounded. Less hype. More realism. Maybe even a bit of financial caution mixed with political confidence.
A resident in Riyadh said something simple that captures public sentiment: “People want to see results. That’s all.”
Another small sentence from an economist echoed that: “Spending must show impact.”
And honestly, that’s the quiet pressure around this budget — proving that years of record spending will convert into actual transformation.
