Saudi Arabia is projecting a fiscal deficit of 3.6% of its gross domestic product (GDP) by 2027, according to a pre-budget statement from the Kingdom’s Finance Ministry. The government has outlined plans to allocate 1.39 trillion Saudi riyals ($370.21 billion) in total expenditure, with anticipated revenues of 1.20 trillion riyals. This budget framework aims to balance development priorities with maintaining fiscal sustainability over the long term.
The Finance Ministry’s projections indicate a significant shift in the economic landscape of Saudi Arabia. By 2029, revenues are expected to increase to 1.351 trillion riyals, while expenditures could rise to 1.544 trillion riyals. These estimates reflect ongoing economic reforms under the Vision 2030 initiative, which have been instrumental in diversifying the economy and enhancing the private sector’s role in economic growth. Notably, non-oil revenues have surged from 166 billion riyals in 2015 to a projected 505 billion riyals by 2025.
Despite these advancements, the Kingdom faces challenges, particularly with oil-sector activity, which is projected to decline by 21.8% in 2026, leading to a potential contraction of 3.6% in real GDP during that year. However, growth in non-oil activities, expected at 3.2%, may partially offset this downturn. By 2027, real GDP growth is forecast to rebound to 12.8%, with inflation remaining stable at an average of 1.9% annually from 2027 to 2029.
Saudi Arabia plans to continue leveraging domestic and international borrowing to finance its fiscal strategy in 2027. This approach will involve issuing bonds, sukuk, and loans, and pursuing project and infrastructure financing. The government emphasizes that its fiscal strategy is designed to support economic growth while maintaining financial stability and flexibility to respond to global economic and geopolitical shifts, all in alignment with the Vision 2030 goals.