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Saudi Arabia projects $21 billion deficit as economy diversifies from oil

The kingdom was among the world’s fastest-growing economies last year with almost 9% GDP growth after a petrodollar boom amid a global rise in energy prices due to inflation and the Ukraine war.
Visitors and Aramco staff climb a dune at Shaybah, the base for Saudi Aramco's Natural Gas Liquids plant and oil production in the surrounding Shaybah field in Saudi Arabia's remote Empty quarter desert close to the United Arab Emirates, on May 10, 2016. Despite collapsed global oil prices, production is expanding at Shaybah, as it is in other units of the company at the centre of the kingdom's Vision 2030 drive for diversification away from oil. The Saudi government plans to sell less than five percent of

Saudi Arabia updated its economic forecast for the next few years, saying it expects a $21 billion deficit for the financial year ending in 2024 — or around 1.9% of the country’s GDP — and deficits until at least 2026. It has previously forecasted surpluses each year until 2025, but making oil cuts and funding mega projects as part of Vision 2030 to expand its non-oil economy has forced the kingdom to revise its targets. 

In a preliminary budget statement published over the weekend, the kingdom said that growth will be lower this year than previously forecasted. It now predicts only 0.03% growth overall — including 5.9% growth in the non-oil economy. Last December, it projected a surplus of 0.4% of its GDP.

The ministry estimated that total expenditures will reach 1.251 trillion Saudi riyals ($333.56 billion), and total revenues of 1.172 trillion Saudi riyals ($312.49 billion). According to the statement, total revenues for fiscal year 2026 are expected to reach 1.259 trillion Saudi riyals and total expenditures are expected to reach 1.368 trillion Saudi riyals.

The kingdom cited reasons for this downgrade as “continued efforts to increase the efficiency of spending and fiscal consolidation, strengthen fiscal sustainability and implement economic and fiscal reforms.”

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