RIYADH: Saudi Arabia’s non-oil revenues saw an annual rise of 2 percent in the first quarter of 2026 to reach SR116 billion ($30.9 billion), official data showed.
The figures, published in the Budget Performance Report covering the three months to March 31 issued by the Ministry of Finance, highlight continued progress in the Kingdom’s efforts to diversify its fiscal base beyond crude oil, even as an increase in government spending pushed the budget deficit to SR126 billion.
Shipments, including re-exports, surged 17.5 percent in January and February to reach SR63.3 billion, with the report indicating continued positive momentum as industrial policy matures. The merchandise trade balance remained in surplus at SR36.9 billion for the same two-month period.
“Total expenditure in the first quarter of 2026 reached approximately SR387 billion, an increase of 20 percent compared to the first quarter of 2025,” the report said, attributing the rise to the implementation of national strategies and projects supporting economic diversification.
Total revenues came in at SR261 billion, a slight 1 percent dip from the SR264 billion seen during the same period in 2025. Oil revenues declined 3 percent to SR145 billion, reflecting softer global energy markets.
The deficit figures sit against a backdrop of broad-based economic expansion. Real gross domestic product grew 4.5 percent in full-year 2025, with oil sector activity rising 5.7 percent and non-oil activity up 4.9 percent. Growth of around 4.6 percent is projected for 2026.
In an interview with Arab News, economist and university professor Jassem Ajaka said the deficit is a result of structural factors within the Saudi economy, adding: “It is the result of a proactive spending policy that uses reserves to finance projects which generate sustainable, future non-oil revenues.”
Ajaka highlighted that “everything being done for financial stability in Saudi Arabia is part of a well-studied plan with clear goals, falling within the framework of Vision 2030. It is part of calculated spending.”
The report showed that inflation remained moderate, with the Consumer Price Index rising roughly 1.8 percent in the first three months of 2026, a level the report said is consistent with stable purchasing power.
The Purchasing Managers’ Index averaged 53.7 points in the quarter, well above the 50-point expansion threshold, pointing to sustained momentum in the non-oil private sector. Industrial production rose 9.8 percent year on year in January and February, reflecting the growing contribution of manufacturing to the broader economy.
Health and social development spending rose 12 percent to SR81 billion, up from SR72 billion a year earlier, reflecting the government’s commitment to citizen welfare as a core policy priority.
Infrastructure and transportation outlays climbed 26 percent to SR12 billion, in line with Saudi Arabia’s goal of becoming a global logistics hub.
Social benefits expenditure edged up 2 percent to more than SR31 billion.
Private-sector employment of Saudi nationals grew by around 139,500 workers in the final quarter of 2025, a 5.8 percent year-on-year increase, bringing the total to approximately 2.5 million.
Point-of-sale spending rose 4.4 percent in the first quarter of 2026 to SR189.7 billion, while e-commerce sales jumped 42.6 percent, underscoring rapid digital adoption.
Bank credit to the private sector expanded 8.8 percent year on year through February, and total foreign reserve assets reached SR1.786 trillion at end-February, up 10 percent from the prior year, partly on the back of an 18.7 percent rise in foreign currency deposits held abroad.
“The deficit in the first quarter remains negligible relative to reserve assets,” Ajaka added, noting that Saudi Arabia can still “easily borrow from the markets, and it has proven during the current crisis its ability to endure.”
Real estate prices eased, with the general property price index falling 1.6 percent and residential prices down 3.6 percent, an outcome the government linked to structural reforms including the vacant land fee aimed at boosting housing supply.
