Finance Minister highlights strategic FY2026 deficit

Finance Minister Mohammed Al-Jadaan

Finance Minister Mohammed Al-Jadaan said the fiscal year 2026 (FY) budget deficit is strategic and targeted, built on a government policy that recognizes the Saudi economy’s ability, along with its solid fiscal capacity, to support spending on projects, achievements, and long-term strategies, even when borrowing is required.

He noted during the government press conference following the release of the FY2026 Budget Statement that the objective is for this borrowing to deliver returns exceeding its cost.

This is already being realized, he explained, as average gross domestic product (GDP) growth, particularly in the non-oil economy, has reached around 5% over the past four to five years.

He added that most CAPEX and OPEX being executed today will generate returns in the coming years, emphasizing that the Kingdom will continue raising expenditure in FY2026, FY2027, and FY2028, as long as the return on spending remains higher than the cost of borrowing.

He said the Kingdom manages public finances prudently, can handle external shocks efficiently, faces no major fiscal challenges, and is focused on achieving long-term sustainability.

According to data published by Argaam, the Council of Ministers has approved the FY2026 budget, setting total expenditures at SAR 1.31 trillion and revenues at SAR 1,14 trillion, resulting in an expected deficit of SAR 165.4 billion.