Saudi Arabia is projecting a fiscal deficit of 3.6 percent of its gross domestic product (GDP) by 2027, according to a pre-budget statement released by the country’s Finance Ministry. This projection comes as the government outlines plans for substantial expenditures aimed at supporting development while ensuring fiscal sustainability.
The Finance Ministry estimates that total expenditure will reach 1.39 trillion Saudi riyals ($370.21 billion), with revenues projected at 1.20 trillion riyals. The budget framework is designed to balance the financing of development priorities with the need for long-term fiscal health. By 2029, Saudi Arabia expects its revenues to increase to 1.351 trillion riyals, while expenditures are anticipated to rise to 1.544 trillion riyals.
Economic reforms under the Vision 2030 initiative have significantly contributed to diversifying the economy, bolstering the business environment, and increasing the private sector’s role in economic growth. A notable outcome of these reforms is the increase in non-oil revenues, which have climbed from 166 billion riyals in 2015 to an expected 505 billion riyals by 2025. In the first half of 2026, non-oil activities grew by 1.8 percent and made up 57.3 percent of the GDP.
However, the Kingdom faces challenges, with preliminary estimates suggesting that real GDP could contract by 3.6 percent in 2026 due to a projected 21.8 percent decrease in oil-sector activity. Despite this, non-oil activity is anticipated to grow by 3.2 percent, helping to counterbalance the downturn in the oil sector. For 2027, the Finance Ministry forecasts a significant rebound in real GDP growth of 12.8 percent. Additionally, inflation is expected to remain stable, averaging around 1.9 percent annually from 2027 to 2029.
Saudi Arabia also plans to continue borrowing from domestic and international markets in 2027. The financing strategy includes issuing bonds, sukuk, and loans, alongside project and infrastructure financing. This approach supports the government’s fiscal strategy, which aims to drive economic growth, maintain financial stability, and retain the flexibility to respond to global economic and geopolitical developments, all while advancing the goals set out in Vision 2030.