Saudi Arabia’s 2027 budget: $371.2 billion in spending and $320.5 billion in revenues

Listen to the article. The audio text is automated, generated by an automated system

Today, Wednesday, the Saudi Ministry of Finance announced the preliminary statement of the state’s general budget for the fiscal year 1448/1449 AH (2027 AD), including estimates of total expenditures amounting to about 1,392 billion riyals (equivalent to 371.2 billion dollars), and revenues of about 1,202 billion riyals (equivalent to 320.5 billion dollars), with a deficit estimated at about 3.6% of the gross domestic product.

The statement comes within the framework of a financial approach that balances supporting economic growth and continuing to implement development priorities, while maintaining the sustainability of public finances.

The statement explained that continuing the implementation of economic diversification initiatives and economic reforms is expected to support revenues in the medium term, as total revenues are expected to reach about 1,202 billion riyals in 2027, reaching about 1,351 billion riyals in 2029.

Economic diversification and reform initiatives contributed to raising non-oil revenues from about 166 billion riyals in 2015 to 505 billion riyals in 2025, which enhanced the stability and sustainability of public revenues.

On the other hand, total expenditures are estimated to reach about 1,392 billion riyals in 2027 AD, reaching about 1,544 billion riyals in 2029 AD, in light of continued spending on development and strategic priorities and projects with economic and social returns.

Expectations indicate a budget deficit for the year 2027 of approximately 3.6% of GDP, within the framework of a financial policy based on long-term financial planning and maintaining financial sustainability.

According to the statement, this allows the government to adopt balanced financial policies across economic cycles to support economic growth and continue implementing priority projects in order to achieve the goals of Saudi Vision 2030.

For his part, Professor of Finance and Investment at Imam University, Dr. Muhammad Makni said that estimates of the Kingdom’s expected revenues at about 1.2 trillion riyals during the next year are based on the basic scenario that the Ministry of Finance builds when preparing the budget, indicating that the Ministry usually adopts three different scenarios, including the least scenario, the basic scenario, and the most stringent scenario.

Makni explained, in an interview with Al Arabiya Business, that the revenue estimate at the level of 1.2 trillion riyals comes within the basic scenario, which assumes a deficit of about 191 billion riyals and a decline of 3.6%.

He added that these estimates do not necessarily mean that the final numbers will remain at these levels, explaining that the basic scenario that was proposed for the year 2026 changed later with developments in economic and geopolitical conditions.

He pointed out that the budget deficit is expected to reach about 245 billion riyals by the end of 2026, a level that was not expected at the beginning of the year.

He stressed that the Ministry of Finance's resort to preparing several scenarios reflects the state of uncertainty and challenges surrounding the global and regional economy, pointing out that government revenues depend on two main sources: oil and non-oil revenues.

The statement indicated that economic and geopolitical developments during the year 2026 affected the pace of the Kingdom’s economic growth, as preliminary estimates indicate a decline in real gross domestic product by 3.6%.

This is attributed to oil activities, which are expected to decline by 21.8%, while positive growth rates in non-oil activities are expected to continue at 3.2%, which contributes to reducing the impact of the decline in oil activities.

The statement reviewed the most prominent estimates of economic indicators for the year 2026, which indicated a growth in non-oil activities by 1.8% during the first half of the year, with their contribution to the gross domestic product rising to historical levels of 57.3% during the same period, supported by strong domestic demand and private investment flows.

Initial expectations also indicate that the inflation rate will rise to about 2.1% for the entire current year, while the unemployment rate among Saudis will decrease to 6.5% in the second quarter of 2026 AD.

The statement explained that the government intends to continue local and international financing operations in accordance with the framework of the medium-term debt strategy, through public and private channels, through the issuance of bonds, sukuk and loans at a fair cost.

It also intends to expand alternative government financing operations during the year 2027 and the medium term, through project financing, infrastructure financing, and export credit agencies.

For his part, the Minister of Finance, Mr. Mohammed bin Abdullah Al-Jadaan, confirmed that the initial estimates for the state’s general budget for the fiscal year 2027 AD come in light of a global economic environment characterized by continued uncertainty and accelerating geopolitical developments.

He pointed out that the Kingdom continues to manage its public finances according to a long-term perspective, which enhances its ability to deal with changes and continue spending on development and strategic priorities, while maintaining the sustainability of its public finances and the solidity of its financial position.

He added: "The government continues to monitor economic and geopolitical developments and evaluate their potential repercussions on the global economy, supply chains, and energy markets, and deal with them with flexible and proactive policies that support the economy and enhance its ability to continue achieving the goals of Saudi Vision 2030."

Al-Jadaan also stressed that the government seeks to continue implementing economic transformation plans, by supporting growth and expanding the economic base, which will be reflected in the growth of non-oil revenues and contribute to achieving more sustainable and stable levels of revenues in the medium and long term.

The Minister of Finance stated that the estimated deficit in the year 2027 AD comes within a financial policy aimed at maintaining the strength of the Kingdom’s financial position and enhancing financial sustainability, in a way that supports growth, adaptation to changes, and management of crises and emergency needs.

This is achieved by maintaining sustainable levels of public debt and significant financial reserves.

The issuance of the preliminary budget statement comes for the ninth year in a row, and includes preliminary data clarifying the Kingdom’s government’s ongoing efforts to add more transparency to public finance performance and enhance financial disclosure.

The statement also aims to inform citizens, investors, and interested parties about the most prominent economic developments and public financial estimates for the coming year and the medium term.

Economic researcher and technical advisor Fadwa Al-Bawardi said that financial risk management represents the most important elements of current financial estimates, in light of a changing global economic environment surrounded by challenges, which requires building advanced models to manage financial and geopolitical risks.

Al-Bawardi explained, in an interview with Al Arabiya Business, that the financial frameworks in the Kingdom focus on identifying the most prominent potential risks, including the escalation of geopolitical tensions, global supply chain disruptions, the continuation of trade protectionist policies, and interest rates remaining at high levels, in addition to oil market fluctuations.

She added that confronting these risks is done by applying a financial policy based on preparing multiple scenarios for revenues and spending, including the basic scenario, the lowest scenario, and the highest scenario.

She pointed out that this approach gives the government sufficient financial space to respond quickly and deal efficiently with any sudden shocks according to pre-determined financial rules.

She stressed that anticipating the risks of global market fluctuations through flexible planning methodologies contributes to maintaining the stability of macroeconomic indicators, including inflation, the trade balance, and other major economic indicators.