Saudi budget deficit hits five-year high amid oil price rout 

Saudi Arabia’s budget deficit in the fourth quarter grew to its highest in five years, as reduced oil prices continue to weigh on its revenues. 

The kingdom's fourth quarter budget deficit rose to 94.9 billion Saudi riyals from 88.5 billion Saudi riyals recorded during the previous quarter and 57.6 billion Saudi riyals posted in the fourth quarter of 2024. 

The budget deficit brought the year’s total shortfall to 276 billion Saudi riyals, which Riyadh has entirely funded through borrowing.  

Fourth quarter revenues slid to 154 billion Saudi riyals from 171 billion Saudi riyals recorded during a year-earlier period.

Non-oil revenue climbed to about 122.6 billion riyals in the fourth quarter of 2025, while oil revenue slid to around 154.2 billion riyals from 170.8 billion riyals a year earlier, according to the ministry data.

Oil and non-oil revenues rose over the previous quarter but dipped on an annual basis. Oil revenues slid 10% year-on-year to 154 billion Saudi riyals in the fourth quarter of 2025, alongside non-oil revenues which fell 7% to 122.5 billion Saudi riyals. Expenditures rose a nominal 3% over the previous year, with compensation to employees constituting up two-fifth.

“With oil prices well below the estimated fiscal breakeven level, Saudi Arabia has ramped up borrowing in international debt markets and diversified its funding sources, while also reassessing the pace and scale of major Vision 2030 projects to prioritize efficiency and private sector participation,” the MUFG report read.  

“While officials expect the deficit narrow to 3.3% of GDP this year, investors anticipate it will remain higher, reflecting persistent spending pressures and a challenging oil revenue environment.”  

The kingdom has been running budget deficits since 2022, as reduced oil revenues strain public finances. Brent crude, which serves as a benchmark for roughly two-thirds of the world's crude oil supplies, is hovering around $71 per against the backdrop of a substantial American military buildup in the Middle East. 

Saudi Arabia needs oil to be north of $92 per barrel this year and at $86.6 per barrel in 2026 to balance its books, according to the IMF.