{"id":104022,"date":"2026-01-13T00:00:00","date_gmt":"2026-01-13T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/ksa\/?p=104022"},"modified":"2026-01-13T04:10:23","modified_gmt":"2026-01-13T04:10:23","slug":"the-2026-fiscal-pivot","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/ksa\/2026\/01\/13\/the-2026-fiscal-pivot\/","title":{"rendered":"The 2026 fiscal pivot"},"content":{"rendered":"

Saudi Arabia is <\/strong>shifting toward fiscal consolidation<\/a><\/strong> in 2026 as it looks to narrow its <\/strong>budget deficit<\/strong> to 3.3% of GDP (SAR 165 bn). This target would mark a significant retreat from the 5.3% (SAR 245 bn) shortfall estimated for 2025, as the Finance Ministry attempts to stabilize the ship following a year of lower oil revenues and aggressive outlays. <\/p>\n

Why this matters:<\/strong> The Kingdom is facing a USD 174.5 bn fixed-income maturity wall<\/a> through 2030, with the government alone on the hook for USD 106.4 bn. To manage this, the Finance Ministry recently approved<\/a> a USD 57.9 bn (SAR 217 bn) borrowing plan for 2026 to cover the deficit and repay SAR 52 bn in maturing principal. <\/p>\n

The growth outlook:<\/strong> Despite the spending slowdown, the Finance Ministry anticipates<\/a> GDP growth to reach 4.6%. This is more optimistic than the IMF\u2019s 4%<\/a> and the World Bank\u2019s 4.3%<\/a> forecasts, which expect to see lopsided growth fueled primarily by the non-oil economy. The multilateral lenders expect to see non-oil activities leading the charge with the help of record-low unemployment and robust private consumption. Emirates NBD echoes this view<\/a>, seeing a larger youth demographic supporting private spending in the year ahead. Meanwhile, the oil sector is expected to have a sluggish start as Opec+\u2019s decision<\/a> to pause production increases throughout 1Q 2026 leaves little room for growth. <\/p>\n

However, this transition requires significant capital: <\/strong>The Kingdom could see elevated debt levels in 2026, as debt is expected to amount to SAR 1.62 tn in FY 2026 (32.7% of GDP), up from an estimated SAR 1.46 tn in FY 2025, according to the government's FY 2026 budget. <\/p>\n

Inflation remains the bright spot:<\/strong> Price growth is projected to hold steady at somewhere between 2.0-2.2% in 2026, according to NBK, Finance Ministry, and World Bank forecasts. A cooling housing market \u2014 aided by the rent freeze in Riyadh \u2014 will help offset rising global commodity costs, according to a research note<\/a> from NBK.<\/p>\n

\n

The GCC at large-<\/p>\n

While the region as a whole is set to register 4.4% growth (up from 4.0% last year), the <\/strong>UAE and Qatar are emerging as the fiscal outliers<\/strong>, Oxford Economics has said. With Brent projected to average at USD 60 \/ bbl, national budgets will be under strain for some countries, such as Saudi Arabia, which is expected to face a deficit of approximately 5.0% of GDP. <\/p>\n

The hydrocarbon hedge:<\/strong> Regional oil GDP is expected to hit 6.5% growth \u2014 the fastest pace since 2022 \u2014 buoyed by Qatar\u2019s North Field expansion and a shift by Opec toward prioritizing market share, according to a separate research note<\/a> from Emirates NBD.<\/p>\n

Non-oil base effects:<\/strong> Aggregate non-oil growth across the GCC is actually expected to slow slightly to 4.4% (from 4.8% in 2025) as the \u201cpost-covid\u201d momentum finally normalizes.<\/p>\n

GCC inflation is anticipated to soften to 1.8%<\/strong> from an estimated 1.9% in 2025, driven by cooling housing costs, lower global oil prices, and a weakening USD, Emirates NBD says.<\/p>\n

(** Tap or click the headline above to read this story with all of the links <\/strong>to our background as well as external sources.)<\/p>\n","protected":false},"excerpt":{"rendered":"

FinMin anticipates GDP growth to reach 4.6%<\/p>\n","protected":false},"author":1,"featured_media":104023,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"newspack_ads_suppress_ads":false,"newspack_popups_has_disabled_popups":false,"newspack_sponsor_sponsorship_scope":"","newspack_sponsor_native_byline_display":"inherit","newspack_sponsor_native_category_display":"inherit","newspack_sponsor_underwriter_style":"inherit","newspack_sponsor_underwriter_placement":"inherit","ep_exclude_from_search":false,"_primary_brand":0,"newspack_featured_image_position":"","newspack_post_subtitle":"","newspack_article_summary_title":"Overview:","newspack_article_summary":"","newspack_hide_updated_date":false,"newspack_show_updated_date":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[4808],"tags":[27,10,273,4807],"brand":[],"newspack_spnsrs_tax":[],"class_list":["post-104022","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-the-year-ahead","tag-economy","tag-enterpriseam-ksa","tag-finance-ministry","tag-the-year-ahead","wpautop","entry"],"acf":{"mongo_id":"8ea9dcac-bfc9-4b0e-b347-ffb2d419e388","order":"6","is_powered_by":false,"story_type":"1","photo_url":"https:\/\/ent.news\/2025\/12\/1053.jpg","photo_position":"above","homepage_title":"","full_issue_title":"In 2026, Saudi Arabia is trading stimulus for stability","related_issue":[104012],"teaser":"FinMin anticipates GDP growth to reach 4.6%"},"yoast_head":"\nThe 2026 fiscal pivot - 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