Saudi Budget 2027.. $371.2 Billion for Spending and $320.5 Billion for Revenues

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The Saudi Ministry of Finance announced today, Wednesday, the preliminary statement of the general budget for the fiscal year 1448/1449 AH (2027 AD), which includes estimates of total expenditures amounting to approximately 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 projected deficit of about 3.6% of the gross domestic product.

The statement comes as part of a financial approach that balances supporting economic growth while continuing to implement developmental priorities, while maintaining the sustainability of public finances.

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

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

In contrast, total expenditures are estimated to reach approximately 1,392 billion riyals in 2027, rising to about 1,544 billion riyals in 2029, as spending continues on developmental and strategic priorities and projects with economic and social returns.

Forecasts indicate a budget deficit for the year 2027 of about 3.6% of GDP, within 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 to achieve the targets of Saudi Vision 2030.

For his part, Dr. Mohammed Makni, a finance and investment professor at Imam University, stated that the expected revenue estimates for the Kingdom at around 1.2 trillion riyals for the upcoming year are based on the baseline scenario that the Ministry of Finance builds when preparing the budget, noting that the ministry typically relies on three different scenarios including the lower scenario, the baseline scenario, and the more 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 baseline 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 figures will remain at these levels, explaining that the baseline scenario proposed for 2026 later changed 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 anticipated at the beginning of the year.

He confirmed that the Ministry of Finance's resort to preparing several scenarios reflects the uncertainty and challenges surrounding the global and regional economy, noting 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 economic growth in the Kingdom, as preliminary estimates suggest a decline in real GDP 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 helps mitigate the impact of the decline in oil activities.

The statement reviewed the main 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 its contribution to the GDP rising to historic levels of 57.3% during the same period, supported by strong domestic demand and private investment flows.

Preliminary forecasts also indicate that the inflation rate is expected to rise to about 2.1% for the entire current year, while the unemployment rate among Saudis decreased to 6.5% in the second quarter of 2026.

The statement clarified that the government intends to continue local and international financing operations according to the medium-term debt strategy framework, through public and private channels, by issuing bonds, sukuk, and loans at fair costs.

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

For his part, the Minister of Finance, Mr. Mohammed bin Abdullah Al-Jadaan, confirmed that the preliminary estimates for the state budget for the fiscal year 2027 come amid a global economic environment characterized by ongoing uncertainty and accelerating geopolitical developments.

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

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

Al-Jadaan also confirmed that the government seeks to continue implementing economic transformation plans, supporting growth and expanding the economic base, which reflects on the growth of non-oil revenues and contributes to achieving more sustainable and stable revenue levels in the medium and long term.

The Minister of Finance indicated that the estimated deficit in 2027 comes within a financial policy aimed at maintaining the strength of the Kingdom's financial position and enhancing financial sustainability, supporting growth and adapting to changes, managing crises, and addressing urgent 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 consecutive year, including preliminary data that clarifies the ongoing efforts of the Kingdom's government to enhance transparency in public finance performance and improve financial disclosure.

The statement also aims to inform citizens, investors, and stakeholders about the most significant economic developments and public finance estimates for the upcoming year and the medium term.

Economic researcher and technical consultant Fadwa Al-Bawardi stated that financial risk management represents one of the most important elements of the current financial estimates, in light of a changing global economic environment surrounded by challenges, which requires building advanced models for managing 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 significant potential risks, including rising geopolitical tensions, disruptions in global supply chains, the continuation of trade protectionist policies, maintaining high-interest rates, along with fluctuations in oil markets.

She added that addressing these risks is done through implementing a financial policy based on preparing multiple scenarios for revenues and expenditures, including the baseline scenario, the lower scenario, and the upper scenario.

This approach provides the government with sufficient financial space to respond quickly and efficiently to any sudden shocks according to pre-defined financial rules.

It emphasized 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 key economic indicators.