Saudi Cabinet Approves 2026 Budget, Prioritizing Vision 2030 and Economic Diversification

Saudi Cabinet Endorses 2026 Budget

The Saudi Arabian Cabinet, in a meeting held on Tuesday, December 2, 2025, officially approved the Kingdom's budget for the fiscal year 2026. The comprehensive financial plan outlines total expenditures of approximately 1.313 trillion Saudi Riyals (SAR), equivalent to about $350 billion USD. Public revenues are projected to reach 1.147 trillion SAR ($306 billion USD), leading to an anticipated deficit of 165 billion SAR ($44 billion USD), which represents 3.3 percent of the Gross Domestic Product (GDP).

Focus on Vision 2030 and Economic Growth

The newly approved budget is strategically aligned with the ambitious goals of Saudi Vision 2030, aiming to accelerate economic diversification and reduce reliance on oil revenues. Crown Prince Mohammed bin Salman emphasized the government's commitment to prioritizing the well-being of citizens and the effective implementation of development and social programs outlined in the budget. He noted that since the launch of Vision 2030, there has been 'improved growth of non-oil activities and a boosted role of the private sector'.

The Kingdom's economy is projected to experience a real GDP growth of 4.6 percent in 2026, primarily driven by a 4.8 percent expansion in non-oil activities. Non-oil revenues are expected to climb by 5.2 percent to 735 billion SAR, reflecting stronger investment income and enhanced economic activity. Finance Minister Mohammed Al-Jadaan highlighted that the budget reflects strategic spending on development projects and aims to reinforce Saudi Arabia's financial strength while ensuring efficient public spending. He further described the projected deficit as a 'strategic deficit,' indicating intentional investment to build a stronger future.

Key Spending Allocations and Fiscal Outlook

The 2026 budget maintains an expansionary spending stance, with significant allocations across various sectors. Approximately 533 billion SAR is earmarked for core services, including education, health, social care, and municipal services. Specific increases include:

• Education spending: A 1.5 percent rise to 202 billion SAR.
• Defense expenditure: A slight increase of 0.3 percent to 240 billion SAR.
• Tourism spending: Expected to reach 351 billion SAR, a rise of roughly 6 percent year-on-year.

Public debt is forecast to reach 1.622 trillion SAR ($432.12 billion USD), representing 32.7 percent of GDP. The Ministry of Finance's statement emphasized the government's focus on enhancing spending efficiency, bolstering the quality of essential services, and advancing giga-projects and priority national strategies. The next phase of Vision 2030, commencing in 2026, will focus on 'maximizing impact' and preparing the nation for the post-2030 era, ensuring long-term economic resilience and global competitiveness.