Image Credit: X/@MOFKSA
Dubai, UAE — May 2026 — Saudi Arabia recorded a fiscal deficit of SAR 125.7 billion ($33.5 billion) in the first quarter of 2026, as government expenditures climbed sharply while oil revenues declined, according to the quarterly budget performance report released by the Ministry of Finance.
Total revenues for the January–March period reached SAR 260.97 billion, a marginal decline of 1 percent compared with SAR 263.6 billion in the same quarter of 2025. Oil revenues fell 3 percent year-on-year to SAR 144.7 billion. Non-oil revenues edged up 2 percent to SAR 116.3 billion, providing a partial offset, with taxes on goods and services — including VAT and excise duties — rising 5 percent to SAR 74.9 billion.
On the spending side, total expenditures jumped 20 percent to SAR 386.7 billion, compared with SAR 322.3 billion a year earlier. The sharpest increases were recorded in subsidies, which more than tripled to SAR 17.5 billion, and grants, which surged 249 percent to SAR 956 million.
Use of goods and services spending rose 52 percent to SAR 98.1 billion, while capital expenditure on non-financial assets climbed 56 percent to SAR 43.4 billion, signaling an acceleration in infrastructure and project delivery. Employee compensation, the largest single spending line, grew a more modest 3 percent to SAR 151.1 billion.
By sector, health and social development was the largest recipient of public spending at SAR 80.8 billion, followed by the military at SAR 64.7 billion and education at SAR 57 billion. The economic resources sector saw the steepest year-on-year expenditure growth at 52 percent, reflecting increased support for non-oil economic activity in line with Vision 2030 priorities.
The kingdom’s public debt rose to SAR 1.667 trillion by the end of the quarter, up from SAR 1.519 trillion at the start of the period. Domestic debt stood at SAR 1.043 trillion and external debt at SAR 624.4 billion, following new issuances of SAR 108.6 billion and SAR 48.75 billion respectively.
The state’s general reserve balance ended the quarter at SAR 400.9 billion, while the current account balance stood at SAR 67.7 billion.
For the full fiscal year 2026, the government has approved a budget projecting total revenues of SAR 1.147 trillion and expenditures of SAR 1.313 trillion, implying an annual deficit target of SAR 165.4 billion — narrower than the SAR 276.6 billion actual deficit recorded in 2025.
