Saudi Arabia’s budget deficit widened sharply in the first quarter, reaching its highest level since 2018 as government spending on economic diversification projects continued to rise, Bloomberg reported on Friday.
The financial impact of the conflict with Iran, which began in late February, is expected to become clearer in second-quarter data, Bloomberg noted © Mena Today
Saudi Arabia’s budget deficit widened sharply in the first quarter, reaching its highest level since 2018 as government spending on economic diversification projects continued to rise, Bloomberg reported on Friday.
According to data from the Ministry of Finance cited by Bloomberg, the kingdom recorded a deficit of 125.7 billion riyals ($33.5 billion). This compares with a deficit of 95 billion riyals in the final quarter of 2025 and more than double the level seen a year earlier.
Oil revenues fell by around 3% year-on-year in the first quarter, while total spending surged by roughly 20%, reaching about $103 billion. The figures highlight growing fiscal pressure on the Middle East’s largest economy.
Saudi Arabia’s gross domestic product grew by 2.8% year-on-year in the first quarter, marking its slowest pace since mid-2024.
The financial impact of the conflict with Iran, which began in late February, is expected to become clearer in second-quarter data, Bloomberg noted. Now in its third month, the conflict—despite a fragile truce—has disrupted regional economies.
Damage to infrastructure and the closure of the Strait of Hormuz to energy exports have weighed on Saudi Arabia. However, the kingdom has managed to redirect most of its oil exports through the Red Sea port of Yanbu, helping to limit the disruption.
Turkey and Saudi Arabia plan to sign an agreement to scrap visa requirements for some of their citizens during talks between their foreign ministers in Ankara on Wednesday, a Turkish diplomatic source said on Tuesday.
The French foreign minister met Saudi Prince Faisal bin Farhan in Riyadh on Thursday, before heading to Doha, Abu Dhabi and Muscat. A busy schedule that raises a blunt question: does anyone in the Gulf still listen to Paris?
The United Arab Emirates' withdrawal from OPEC weakens the group's control over global oil markets and potentially risks widening a rift with Gulf neighbour Saudi Arabia, the de facto leader of the crude producers' organisation.
To make this website run properly and to improve your experience, we use cookies. For more detailed information, please check our Cookie Policy.
Necessary cookies enable core functionality. The website cannot function properly without these cookies, and can only be disabled by changing your browser preferences.
