Saudi Arabia budget report 2026

On 2 December 2025, the government approved the fiscal year (FY) 2026 budget statement as presented by the Ministry of Finance (MoF). In our annual KPMG budget report, we present our views, supported by internal analysis and additional sources.

Real GDP growth in Saudi Arabia accelerated from 2.7 percent in FY2024 to an estimated 4.4 percent in FY2025, driven mainly by strong non-oil activity. Non-oil GDP is estimated to grow 5 percent YoY in 2025, supported by expanding domestic manufacturing infrastructure – including increased local content in government procurement – as well trade, transport and logistics.

The economy’s structure has shifted notably since the launch of Vision 2030: the non-oil sector accounted for 55.6 percent of real GDP in the first half of 2025, up from 45.4 percent in 2016. Vision 2030 initiatives have elevated the role of private enterprises – both domestic and foreign – in job creation, sectoral expansion, and overall economic diversification.

Oil revenues have weakened in 2025 because higher production levels are being outweighed by lower global oil prices. However, strong domestic non-oil GDP and continued fiscal reforms have boosted non-oil revenues, a trend expected to persist into 2026 as non-oil income becomes an increasingly important part of government finances.

Looking ahead, in the scenario of continued falling global oil prices, these will partly offset gains from higher oil production. The government is expected to maintain a structured approach to spending according to its priorities, with less dependency on oil revenue movement than last decade and remains focused on upholding its commitments to Vision 2030 initiatives.

The 2026 budget statement adopts the government’s customary conservative approach in relation to revenue growth assumptions, with total revenues projected to reach SAR1,147 billion in 2026, representing a healthy year-on-year (YoY) growth rate of 5.1 percent. Non-oil real GDP growth is forecast to remain robust and broad-based, in turn supporting private consumption and thus tax revenues and corporate profitability. The 2026 budget statement estimates that total government revenues will decline by 13.3 percent year-on-year to SAR1,091 billion in FY2025. This outcome is also lower than the original FY2025 budget target of SAR1,184 billion, indicating a revenue shortfall relative to earlier expectations.

Total public expenditure is projected to decline from an estimated SAR1,336 billion in 2025 to SAR1,313 billion in 2026. The 2026 budget seeks to restrain or reduce spending across all sectoral categories, with expenditures expected to decrease YoY, largely as part of the government’s public sector spending efficiency agenda of reducing costs while improving service quality. Lower capital expenditures (CAPEX) also in part reflect progress in Vision 2030, as many earlier objectives have been met and several major projects have moved to completion.

As the Kingdom progresses toward the third phase of Vision 2030, the budget reaffirms its commitment to strategic investments that promote economic diversification, reinforce social support systems, and uphold fiscal stability. Through these initiatives, Saudi Arabia is well-equipped to navigate global uncertainties and sustain long-term economic growth.

We hope you find this publication valuable for your organization, and our KPMG teams remain available to discuss our insights in greater detail.