Pre-budget reflects balance between economic transformation, fiscal sustainability: Al Rajhi Capital

Al Rajhi Capital said, in its “2026 Saudi Pre-Budget Overview” report, that the Kingdom’s pre-budget for 2026 reflects a balance between sustaining economic transformation through targeted spending and maintaining fiscal sustainability.
 

The Ministry of Finance projects spending to reach SAR 1,313 billion in 2026. This trajectory reflects the government’s commitment to maintain countercyclical spending while focusing allocations on high-impact development and social sectors. Medium-term projections show expenditure growth toward SAR 1, 419 billion by 2028, supporting Vision 2030 transformation initiatives, it added.
 

Total government revenues for FY26 are estimated at SAR 1,147 billion, reflecting an improvement compared with revised estimates for 2025. The increase in revenue is underpinned by expectations of stronger domestic economic activity and continued structural reforms that are broadening the contribution of non-oil revenue, according to Al Rajhi Capital.
 

The above fiscal projections are expected to result in a budget deficit of SAR 165 billion in 2026 (3.3% of GDP). This marks an improvement from the revised 2025 deficit of SAR 245 billion (5.3% of GDP), with further consolidation projected in the following years to reach 2.3% of GDP in 2027 and 2.2% in 2028, said the research firm.
 

On the financing side, the Kingdom will continue to rely on a mix of domestic and international debt instruments—bonds, sukuk, and loans at fair cost—while expanding alternative financing vehicles such as project and infrastructure finance supported by export credit agencies, it added.