The Kingdom tapped bank financing in the first move under the government’s “deficit by design” phase. The National Debt Management Center lined up a USD 13 bn (SAR 48.8 bn), seven-year syndicated loan to fund utility and infrastructure projects, it said in a statement on Wednesday.

The borrowing follows the release of the FY 2026 budget, which pencils in a SAR 165 bn (USD 44 bn) deficit this year. Finance Minister Mohammed Al Jadaan also approved the Kingdom’s borrowing plan for the year yesterday, penciling in SAR 217 bn in financing requirements to cover the budget deficit and principal repayments for debts maturing in 2026.

The NDMC’s loan covers around 30% of the projected 2026 deficit, meeting near-term liquidity needs without rattling bond markets while helping keep yields steady before expected international issuance later this year.

IN CONTEXT- Updated 2025 figures show the deficit swelling to nearly SAR 245 bn (USD 65 bn) — more than double earlier estimates — as project spending accelerates and oil output trims revenues. The government is widening its funding toolkit as it prepares for a massive debt wall, with approximately USD 174.5 bn in fixed-income maturities coming due through 2030, of which the government accounts for USD 106.4 bn.

Deficit by design: Al Jadaan was explicit that the deficit is a policy choice, saying that the government is willing to sustain higher deficits through 2028 to invest in the economy and unlock private-sector growth, as long as returns exceed borrowing costs. Public debt is expected to reach SAR 1.62 in FY 2026 (32.7% of GDP), up from SAR 1.46 tn a year earlier.

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