{"id":114946,"date":"2026-05-08T00:00:00","date_gmt":"2026-05-08T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/menaplus\/?p=114946"},"modified":"2026-05-08T05:59:08","modified_gmt":"2026-05-08T05:59:08","slug":"higher-defense-subsidy-spending-pushed-saudi-arabias-widening-1q-2026-budget-deficit","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/menaplus\/2026\/05\/08\/higher-defense-subsidy-spending-pushed-saudi-arabias-widening-1q-2026-budget-deficit\/","title":{"rendered":"Higher defense + subsidy spending pushed Saudi Arabia\u2019s widening 1Q 2026 budget deficit"},"content":{"rendered":"

Saudi Arabia\u2019s books took a beating in the first three months of 2026<\/strong>, with the Kingdom\u2019s 1Q fiscal deficit expanding to SAR 125.7 bn \u2014 the highest quarterly shortfall since 2018, and almost the entire FY 2026 deficit projection of SAR 165.4 bn racked up in three months.<\/p>\n

Driving the deficit: <\/strong>Defense spending rose 26% y-o-y (thank you, Iran), subsidies leapt 170%, and total expenditures climbed 20% to SAR 386.7 bn while revenues fell 1%, Finance Ministry figures show (pdf)<\/a>. \u201cIt is hard to draw too much of a conclusion on spending from one quarter, but 1Q is usually quite modest, whereas this was the second highest quarter on record,\u201d Justin Alexander, director of Khalij Economics and GCC analyst for GlobalSource Partners, told us. Recurring spending, he adds, is \u201clikely to remain well above budget through this year.\u201d<\/p>\n

PIF\u2019s answer arrived almost on cue.<\/strong> The fund came back to the USD market for the first time<\/a>since war broke out<\/a> USD 7 bn, three-tranche bond that generated more than USD 24 bn in demand. Bankers priced it inside initial guidance<\/a> across the curve. The raise followed Emirates NBD\u2019s Additional Tier 1 and First Abu Dhabi Bank\u2019s sukuk earlier in the week, suggesting the Gulf primary market is reopening. <\/p>\n

IN OTHER PIF NEWS- <\/strong>The fund is opening an office in Shanghai as a satellite of its existing Beijing hub as Riyadh looks to expand ties to China<\/a>. The new office will support outbound deals in China and route Chinese capital into the sectors Governor Yasir Al Rumayyan has flagged as priorities for PIF\u2019s overseas allocation<\/a>, including global equities, infrastructure, technology, aerospace, gaming. <\/p>\n

What Saudi wants from China: <\/strong>To sell more oil of course \u2014 and to see more deals like the one that will see the first Saudi-assembled Lenovo devices<\/a>, expected to ship later this year. <\/p>\n","protected":false},"excerpt":{"rendered":"

The PIF followed the release of the deficit data with a new USD 7 bn 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the gap","related_issue":[114935],"teaser":"The PIF followed the release of the deficit data with a new USD 7 bn bond"},"yoast_head":"\nHigher defense + subsidy spending pushed Saudi Arabia\u2019s widening 1Q 2026 budget deficit - MENA+ Edition<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/enterpriseam.com\/menaplus\/2026\/05\/08\/higher-defense-subsidy-spending-pushed-saudi-arabias-widening-1q-2026-budget-deficit\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Higher defense + subsidy spending pushed Saudi Arabia\u2019s widening 1Q 2026 budget deficit\" \/>\n<meta property=\"og:description\" content=\"The PIF followed the release of the deficit data with a new USD 7 bn bond\" \/>\n<meta property=\"og:url\" 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