Saudi Arabia Posts Record Budget Deficit Amid Decline in Oil Sales

Saudi Arabia Reports Significant Increase in Budget Deficit Amid Decline in Oil Revenues

The Saudi Ministry of Finance has released its latest budget figures, revealing a sharp rise in the kingdom’s budget deficit to 125.7 billion riyals ($33.5bn) for the first three months of the year. This represents a significant increase from the same period last year and nearly one-third more than the final quarter of 2025.

According to the figures, total government spending rose 20 percent to 386.7 billion riyals year-on-year, while oil revenues fell 3 percent to 144.7 billion riyals. The budget gap is attributed to rising government spending and a decline in crude sales.

The largest contributor to increased government spending was economic resources, which saw a 52 percent rise year-on-year. Other sectors, including general items, military, infrastructure, and transport, also experienced significant increases in expenditures. Non-oil revenues rose by 2 percent, partly offsetting the drop in commodities sales.

The decline in oil revenues is largely attributed to the effective closure of the Strait of Hormuz, which has resulted in a loss of key economic lifeline for Saudi Arabia. The kingdom has been able to reroute much of its exports through the Red Sea port of Yanbu via the East-West Pipeline.

The latest budget figures mark a significant departure from the kingdom’s financial outlook for 2026, which was projected to be a deficit of 65 billion riyals ($17bn).

Source: Al Jazeera