IMF Projects Saudi Growth Despite 34.3 Billion Riyal Quarterly Deficit

The International Monetary Fund projects Saudi Arabia will see economic growth of 1.7% in 2026, accelerating to 5.5% in 2027. According to the IMF's 2026 Article IV Consultation, the economy remains resilient despite geopolitical conflicts in the Middle East and shipping disruptions in the Strait of Hormuz. This stability is attributed to structural reforms under Vision 2030, strong macroeconomic fundamentals, and the East-West pipeline's ability to reroute oil to Red Sea ports.

Concurrent with these projections, the Saudi Arabian Ministry of Finance reported a budget deficit of 34.3 billion riyals ($9.1 billion) for the second quarter of 2026. While total revenues rose 12% year-on-year to 338.8 billion riyals, government spending on health, social development, and military sectors increased by 11%. For the first half of 2026, the cumulative deficit reached 160 billion riyals ($42.7 billion), which the government financed entirely through borrowing. This pushed outstanding public debt to approximately 1.685 trillion riyals by the end of June.

Saudi Minister of Finance Mohammed Al-Jadaan welcomed the IMF's findings, noting that they affirm the economy's agility. The IMF also praised the Saudi Central Bank's stability measures and the banking sector's capital buffers, concluding that the Kingdom possesses sufficient fiscal space to withstand external shocks.