Saudi Arabia Sets Out a Wider Fiscal Plan for 2027
Saudi Arabia is projecting a budget deficit of about SR190 billion ($50.6 billion) in 2027, equivalent to 3.6% of gross domestic product, as the Kingdom plans to maintain spending on development programs and strategic projects.
Total government expenditure is estimated at approximately SR1.392 trillion, while revenues are expected to reach around SR1.202 trillion. Over the medium term, revenues are projected to rise to about SR1.351 trillion by 2029, while spending could reach SR1.544 trillion.
The fiscal outlook comes as Saudi Arabia continues to balance large-scale investment with longer-term efforts to maintain sustainable public finances. The government has indicated that development and strategic priorities will remain funded even as economic and geopolitical conditions create uncertainty.
The budget framework is closely connected to the Kingdom’s economic transformation agenda, which seeks to expand activity beyond oil and increase the role of private businesses in generating growth and employment.
Non-Oil Economy Becomes Increasingly Important
Saudi Arabia’s economic diversification efforts are becoming increasingly visible in the structure of national output and government revenue. Non-oil revenues increased from approximately SR166 billion in 2015 to SR505 billion in 2025, providing a broader revenue base for public finances.
During the first half of 2026, non-oil activities grew by 1.8%, raising their contribution to GDP to a record 57.3%. For the full year, non-oil activity is expected to grow by about 3.2%, helping offset a significant decline in oil-sector activity.
The overall economy, however, faces a challenging 2026. Preliminary estimates indicate that real GDP could contract by 3.6%, with oil activity expected to fall by approximately 21.8%. Inflation is projected at around 2.1%, while unemployment among Saudi nationals fell to 6.5% in the second quarter.
The government is forecasting a sharp improvement in growth in 2027, with real GDP projected to expand by 12.8%. Inflation is expected to remain comparatively contained at about 1.9% annually from 2027 through 2029.
Borrowing to Support Investment While Maintaining Fiscal Flexibility
Saudi Arabia plans to continue accessing both domestic and international debt markets in 2027. Financing is expected to include conventional bonds, sukuk and loans, alongside alternative mechanisms such as project financing, infrastructure financing and export-credit arrangements.
The borrowing strategy forms part of a medium-term approach designed to provide funding for government priorities while preserving flexibility in public finances. The projected deficit therefore sits alongside continued efforts to manage debt and maintain financial reserves.
The Kingdom’s fiscal planning is taking place against a backdrop of geopolitical uncertainty, changing energy-market conditions and risks to global supply chains. The government has indicated that it will continue adjusting fiscal policies as conditions evolve while maintaining spending on development priorities.
For Saudi Arabia, the 2027 budget outlook highlights the transition taking place across the economy: oil remains central to public finances, but expanding non-oil activity, diversified government revenues and continued investment are becoming increasingly important elements of the country’s long-term economic strategy
