Saudi Arabia posts $9.12bn deficit in Q2

Saudi Arabia recorded a budget deficit of SR34.3 billion ($9.14 billion) in the second quarter of 2026, bringing the Kingdom’s total deficit for the first half of the year to SR160 billion, according to the Ministry of Finance.

The second-quarter deficit was significantly lower than the SR125.7 billion shortfall recorded in the first three months of the year, as government revenues increased while spending remained high.

Government revenues rose 12% year over year to SR338.8 billion in the second quarter, while total spending increased 11% to SR373 billion.

Oil revenues contributed SR185.1 billion to government income, while non-oil revenues reached SR153.7 billion during the quarter.

During the first six months of 2026, Saudi Arabia financed the entire SR160 billion deficit through borrowing and did not use government reserves. The government borrowed SR125.7 billion in the first quarter and SR34.3 billion in the second quarter.

Spending on infrastructure and transportation projects increased 21% in the first half of 2026 compared with the same period last year. Expenditure on health and social development also rose 10%.

The latest figures come as Saudi Arabia continues to invest heavily in major development and economic diversification projects while managing the impact of changes in global oil markets.

The International Monetary Fund (IMF) said in its latest report that Saudi Arabia’s economy is expected to remain resilient despite geopolitical challenges. The IMF projected economic growth of 1.7% this year, followed by stronger growth of 5.5% in 2027.

The IMF noted that conflicts in the Middle East and disruptions to shipping through the Strait of Hormuz have affected economic activity, trade, oil exports and investor confidence. However, it said Saudi Arabia’s economy remains strong due to its solid financial position and diversified oil and logistics sectors.

The Ministry of Finance report showed that employee salaries remained the largest government expense, reaching SR144.3 billion in the second quarter, an increase of 3% compared with the same period last year.

Spending on goods and services rose 1% to SR74.28 billion, while financing costs increased 41% to SR16.8 billion.

Government spending on subsidies increased 73% to SR13.2 billion, while grants jumped 199% to SR1.24 billion. Social benefits rose 8% to SR42.5 billion, other expenses increased 49% to SR34.4 billion, and spending on nonfinancial assets grew 16% to SR46.2 billion.