Saudi Arabia unveiled its budget for the fiscal year of 2026 yesterday as Riyadh marks the mid-point of the kingdom’s diversification plan: Vision 2030.
Budget Breakdown:
The Ministry of Finance estimated total revenues are to reach SR1, 147bn (2026) and total expenditures are to reach SR 1, 313bn (2026) signalling an annual deficit of SR 165.4bn ($44bn USD), equivalent to 3.3% of GDP.
This annual deficit marks a welcome fall from the 2025 budget deficit, estimated to be SAR245bn, the equivalent of 5.3% of GDP (2025).
According to the Saudi budget, the budget deficit is estimated to continue at lower levels over the medium because of the government’s adoption of “targeted countercyclical spending policies.”
Growth Forecast:
Growth is forecast to level at 4.0% in 2026, according to the IMF, concurrent to the fall in the annual budget deficit planned for 2026.
The forecast is welcome news for KSA as global growth remains “slow” in the medium term owing to protectionist policies, higher global debt levels, and relatively high albeit declining interest rates.
From Real Estate and Giga Projects to AI:
No mention of NEOM was noticeable in the 2026 budget.
While NEOM was previously mentioned, it’s omission indicates a reassessment of realistic goals that align with non-oil revenues whilst doubling down on sectors with faster returns such as AI.
At the same time, other plans like the Sindalah luxury island and the sprawling ski resort Trojena, have also faced setbacks.
It comes as KSA reallocates fiscal spending on logistics and intelligence instead.
KSA AI Ambitions:
The budget aims to add two unicorn companies in the Saudi market by the end of FY2026 whilst making KSA among the top 17 countries in the world in AI by 2030.
Top of the list is the AI vehicle, Humain, owned by the Saudi PIF. KSA’s AI drive comes as the UAE expands its own efforts through G42.
Low-cost energy supplies, American sponsoring via Silicon Valley, and a sustained backup revenue – through state-backed oil investment – puts the Kingdom in a strong place to refocus 2026 as the year of fast returns.
A focussed budget – that is realistic of the fiscal constraints and construction abilities of Vision 2030 – is a welcome sign for the kingdom and investors seeking reassurance following the likely scale-back or scrapping of failed initiatives: NEOM.
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