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‏Saudi Arabia Announces Pre-Budget Statement for FY 2026: Expenditures Estimated at SAR1,313B, Revenues at SAR1,147B

File photo of the Saudi capital (Reuters)
File photo of the Saudi capital (Reuters)
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‏Saudi Arabia Announces Pre-Budget Statement for FY 2026: Expenditures Estimated at SAR1,313B, Revenues at SAR1,147B

File photo of the Saudi capital (Reuters)
File photo of the Saudi capital (Reuters)

The Saudi Ministry of Finance announced on Tuesday the Pre-Budget Statement for Fiscal Year 2026, which estimates total expenditures will reach about SAR1,313 billion, total revenues about SAR1,147 billion, recording a deficit of 3.3% of GDP. It confirmed that the government will continue to adopt expansionary spending policies that are contrary to the economic cycle, and the directed towards national priorities with social and economic impact, and in a way that contributes to achieving the goals of the Saudi’s Vision 2030 and diversifying the economic base.

The Pre-Budget Statement noted that, since the launch of Vision 2030, the Saudi economy has witnessed structural reforms that have been reflected in the improvement of the business environment, enhancing the role of the private sector and helping more toward achievement of the Sustainable Development Goals. Preliminary estimates for 2026 project growth in real GDP of about 4.6%, supported by the expected growth of non-oil activities.

The Pre-Budget Statement said that the positive performance of non-oil activities and the continued implementation of supporting initiatives are estimated to lead to positive developments in revenues over the medium term, as total revenues are expected to reach about SAR1,147 billion in 2026, reaching about SAR1,294 billion in 2028, and total expenditures are expected to reach about SAR1,313 billion in 2026, reaching about SAR1,419 billion in 2028.

The acceleration of the pace of implementation of a number of programs and projects contributed to achieving tangible gains and providing financial flexibility that enabled the government to enhance its ability to respond to developments and adopt a fiscal policy contrary to the economic cycle.

The Pre-Budget Statement predicted that the budget deficit will continue to be recorded in the medium term at lower levels to the estimated percentage for the year 2026, as a result of the government's continued adoption of expansionary and transformative spending policies, aimed at continuing the implementation of projects, programs and initiatives with economic and social returns, while maintaining financial sustainability.

The Pre-Budget Statement also reviewed the most prominent forecasts for economic indicators for the year 2025, as the real GDP is expected to register a growth of 4.4%, supported by the growth of non-oil activities, which is expected to register a growth of about 5.0% at the end of 2025, due to the continued growth of domestic demand and the improvement of employment levels, which led to a reduction in the unemployment rate among Saudis, which reached record levels of 6.8% in the second quarter of 2025

The Pre-Budget Statement also noted that the government intends to continue local and international funding activities from public and private channels, through the issuance of bonds, sukuk and loans at a fair cost, in addition to expanding the government alternative funding activities via project finance, infrastructure financing, and through export credit agencies, during the year 2026 and the medium term.

‏Minister of Finance Mohammed Al-Jadaan stressed that the 2026 budget aims to consolidate the strength of the Kingdom's financial position, and ensure the sustainability of public finances, in parallel with supporting economic growth, by committing to maintaining development and social spending priorities, ensuring that structural reforms that enhance financial and economic efficiency and sustainability are moving forward.

He also noted that the ratio of public debt to GDP is still at relatively low levels compared to many other economies, and that it is within safe limits compared to the size of the economy, and is supported by financial reserves, giving the Kingdom's fiscal policies the ability to balance the requirements of growth and sustainability, while maintaining flexibility to intervene in response to shocks or in the event of crises or emergency needs.

Al-Jadaan said, "In light of the continued global uncertainty during 2026 and over the medium term, as a result of the possibility of continued geopolitical tensions and increasing preventive policies, the government continues to monitor and analyze these risks, as a key element in enhancing the efficiency of financial planning, and proactively guide policies to address potential global economic challenges and reduce their negative impacts."

He stressed that the government continues to support economic growth by continuing development projects and implementing national strategies, including targeted spending to support priorities with economic and social returns, and motivating the private sector to be an effective partner in development, while maintaining the efficiency of spending in the medium and long term in order to achieve a balance between development requirements and the determinants of financial sustainability.

The Pre-Budget Statement, which is issued for the eighth consecutive year, is part of the Kingdom's ongoing efforts to deliver more transparency in public finance and boost fiscal disclosure. It reflects the government's efforts to complete the implementation of reforms that contributed to strengthening its fiscal position in light of the challenges witnessed in the global economy.

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UAE, Jordan Sign $2.3 billion Aqaba Rail Project Deal

UAE, Jordan Sign $2.3 billion Aqaba Rail Project Deal
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UAE, Jordan Sign $2.3 billion Aqaba Rail Project Deal

UAE, Jordan Sign $2.3 billion Aqaba Rail Project Deal

The United Arab Emirates and Jordan signed on Wednesday an agreement to launch a $2.3 billion rail project to Aqaba port and to create a joint company to build and operate it, the state news agencies in both countries reported.

The agreement covers the construction and operation of a 360-kilometre railway linking the mining areas of Al-Shidiya and Ghor Al-Safi in Jordan to its Aqaba port.

The project aims to transport 16 million metric tons of phosphate and potash annually, with a total investment value of $2.3 billion.

As part of the agreement, the UAE–Jordan Railway Company was launched as a joint venture between several Jordanian stakeholders and L’IMAD Holding Company, Abu Dhabi's newest sovereign wealth fund, the UAE 's state news agency said.

The project is the first step in building the Jordanian national railway network project to connect Aqaba with neighboring Arab countries, and to link the port with those in Syria and the Mediterranean, the Jordanian state news agency said.

Business

Chaired by Saudi Crown Prince, PIF Board of Directors Approves PIF 2026-2030 Strategy

Saudi Crown Prince Mohammed bin Salman - SPA
Saudi Crown Prince Mohammed bin Salman - SPA
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Chaired by Saudi Crown Prince, PIF Board of Directors Approves PIF 2026-2030 Strategy

Saudi Crown Prince Mohammed bin Salman - SPA
Saudi Crown Prince Mohammed bin Salman - SPA

The Public Investment Fund (PIF) Board of Directors, chaired by Prince Mohammed bin Salman bin Abdulaziz Al Saud, Crown Prince and Prime Minister, has approved PIF’s 2026-2030 strategy, a continuation of the fund’s long-term strategy that will focus on delivering competitive domestic ecosystems to connect sectors, unlock the full potential of strategic assets, maximize long-term returns, and continue to drive the economic transformation of Saudi Arabia and further enhance the quality of life of its citizens.

The 2026-2030 strategy marks a natural evolution as PIF moves from a period of rapid growth and acceleration to a new phase of sustained value creation, with a strengthened focus on maximizing impact, raising the efficiency of investments, and applying the highest standards of governance, transparency and institutional excellence. In addition, PIF will further enable the role of the private sector as an effective partner for sustainable economic development, according to SPA.

Under the 2026-2030 strategy, PIF has structured its investments into three portfolios. The Vision Portfolio aims to leverage synergies across strategic sectors, maximize value for PIF portfolio companies, and continue to drive the growth of the local economy. It will contribute to national priorities through the delivery of six competitive domestic ecosystems and by further integrating PIF’s investments. The Vision Portfolio will unlock new opportunities for the domestic private sector as an investor, partner, and supplier, to further enable its role as an effective partner for sustainable economic development, while also attracting global partners and investors.

The six ecosystems include: Tourism, Travel, and Entertainment; Urban Development and Livability; Advanced Manufacturing and Innovation; Industrials and Logistics; Clean Energy, Water, and Renewables Infrastructure; and NEOM.

The Strategic Portfolio will actively manage key strategic assets to maximize financial returns and the economic impact of PIF’s companies, while supporting their efforts to attract capital and become global champions. Through the Strategic Portfolio, PIF will also continue to invest in opportunities arising from long-term global trends.

The Financial Portfolio will focus on delivering sustainable financial returns to further strengthen PIF’s financial position and continue to grow national wealth for future generations. It will manage PIF’s direct and indirect investments in global markets to maximize returns, while building a more diversified and resilient portfolio. It will further strengthen strategic international partnerships to help attract capital and increase access to global investment opportunities.

PIF Governor Yasir Al-Rumayyan said: "PIF’s strategy continues to deliver results as we grow domestically and internationally. In less than a decade, we have launched unprecedented projects, including giga-projects and major real estate developments, in addition to unique investments in strategic sectors such as artificial intelligence, gaming and esports, and renewable energy. PIF also grew assets under management six-fold and attracted global partners and capital to take part in Saudi Arabia’s transformation."

He added that PIF will continue to support Saudi Vision 2030 objectives by delivering competitive domestic ecosystems, investing in national champions that have the potential to scale globally, and forming global economic partnerships, building on what has been achieved under PIF’s 2021-2025 strategy.

"The 2026-2030 strategy is a natural next step in PIF’s growth journey. It offers our partners more opportunities to invest in high-quality assets and ecosystems, alongside PIF. In the next five years, we will continue to build on our great achievements and strengthen our global leadership to deliver success for PIF and Saudi Arabia," Al-Rumayyan said.

PIF will continue to invest with agility in both local and international markets and maintain its ability to respond to emerging opportunities that benefit the local economy and impact an ever-shifting global economy. It will maintain a disciplined focus on value realization, sustainable returns, enhanced capital efficiency and the highest institutional standards, as it drives innovation and advanced utilization of data and artificial intelligence.

PIF’s 2026-2030 strategy provides a clear strategic direction for the coming decades. It also strengthens PIF’s position as a local and global investor, with a diversified and resilient portfolio that contributes to Saudi Arabia’s long-term economic prosperity. PIF’s unique mandate will remain the same: to drive the economic transformation of Saudi Arabia and generate sustainable financial returns.

The strategy builds on the substantial progress and achievements delivered by PIF under its previous strategies, including increasing grown assets under management from $150 billion in 2015 to more than $900 billion; achieving an annualized total shareholder return of over 7% since 2017; investing more than $199 billion in new projects in Saudi Arabia from 2021 to 2025; contributing more than $243 billion to real non-oil GDP from 2021 to 2024, equivalent to around 10% of Saudi Arabia’s total non-oil GDP in 2024; spending together with its portfolio companies more than $157 billion with the local private sector from 2021 to 2024; expanding PIF’s global presence in priority markets with subsidiary company offices in North America, Europe, and Asia to deepen PIF’s ties in international markets and continue to invest in sectors, industries, and companies shaping the future of the global economy; and being one of the few sovereign wealth funds with strong credit ratings from each of the world’s top three rating agencies. Moody’s rated PIF Aa3 with a stable outlook, while Fitch rated PIF A+, also with a stable outlook

Business

World Bank to Asharq Al-Awsat: Saudi Arabia Plays a Central Role in Stabilizing Energy Markets

A cargo ship in the Gulf, near the Strait of Hormuz, March 11, 2026. REUTERS/Stringer/File Photo
A cargo ship in the Gulf, near the Strait of Hormuz, March 11, 2026. REUTERS/Stringer/File Photo
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World Bank to Asharq Al-Awsat: Saudi Arabia Plays a Central Role in Stabilizing Energy Markets

A cargo ship in the Gulf, near the Strait of Hormuz, March 11, 2026. REUTERS/Stringer/File Photo
A cargo ship in the Gulf, near the Strait of Hormuz, March 11, 2026. REUTERS/Stringer/File Photo

At a time when geopolitical tensions are disrupting the stability of vital maritime corridors, fundamental questions are emerging about the ability of major economic ambitions in the Gulf to withstand the test of the Strait of Hormuz, which is an indispensable “lifeline” for the global economy, said Roberta Gatti, Chief Economist for the Middle East, North Africa, Afghanistan, and Pakistan at the World Bank.  

In remarks to Asharq Al-Awsat, Gatti warned that current geopolitical tensions place the region’s economic diversification ambitions under a real test, while stressing, on the other hand, the central role Saudi Arabia plays in global energy markets through measures aimed at enhancing the reliability of supply chains.  

The Kingdom’s efforts extend not only to exporters, but also to inflation, trade, and global growth, she added. 

Last week, the World Bank issued a report ahead of the Spring Meetings of the World Bank and the International Monetary Fund, in which it maintained Saudi Arabia at the forefront, with projected growth of 3.1 percent in 2026, highlighting it as the Gulf economy most capable of coping with the repercussions of the current geopolitical crisis, despite sharp revisions affecting regional estimates.  

Data in the report also showed that the fiscal deficit is expected to narrow by half to 3 percent, from 6 percent in 2025, alongside a shift in the current account balance from a deficit of -2.7 percent to a surplus of 3.3 percent.  

Roberta Gatti, Chief Economist for the Middle East, North Africa, Afghanistan, and Pakistan at the World Bank. (World Bank)

On Monday, the United States imposed a naval blockade on Iranian ports, in an attempt to increase pressure on Iran to reopen Hormuz following the collapse of peace negotiations in Pakistan over the weekend. The negotiations are expected to resume in the coming days. 

Gatti stressed: “Saudi Arabia plays a central role in global energy markets, and its efforts to strengthen resilience are especially important at a time of heightened uncertainty around the Strait of Hormuz.” 

“Measures that enhance the reliability of energy supply chains - whether through infrastructure investment, alternative export routes, spare capacity, or stronger logistical preparedness - can help reduce the risk that such shocks translate into broader global disruption,” she added.  

“These efforts matter not only for reducing volatility in global oil and gas markets for the benefit of the exporters, but also for global inflation, trade, and growth, especially in energy-importing developing countries that are highly vulnerable to volatility of these markets.” 

Economic Diversification Under Stress Test

Gatti said the current conflict has directly highlighted the strategic importance of economic diversification, which is a core objective adopted in national development plans across GCC countries. She pointed out that data recorded since February 28 clearly reflects this divergence, stating: “The current conflict has highlighted the importance of economic diversification, an objective mentioned in multiple National Development Plans of GCC countries.” 

“Since February 28, relatively more diversified economies, such as the UAE and Bahrain, have seen their forecasts downgraded significantly less than those of less diversified economies, such as Qatar and Kuwait. In addition, these larger forecast downgrades for Qatar and Kuwait reflect their higher reliance on route that goes through the Strait of Hormuz for trade and energy exports and the lack of alternative bypass routes.” 

The World Bank expects Qatar’s economy to contract by 5.7 percent, marking a downgrade of 11 percentage points from previous estimates due to damage to liquefied natural gas supplies. Kuwait’s economy is also expected to contract more sharply by 6.4 percent, given its 100 percent reliance on the Strait of Hormuz for oil exports, making any closure of the waterway equivalent to a complete halt of the country’s financial lifeline.

In contrast, the UAE and Oman are expected to grow by 2.4 percent each, while Bahrain is expected to grow by 3.1 percent.

In this context, Gatti said: “The ‘Vision’ strategies remain appropriate and important as they aim to reduce structural dependence on hydrocarbons and promote private sector-led growth, but, as these recent events show, their implementation is sensitive to external shocks and the impacts are likely to be uneven across the region: more diversified economies tend to be more resilient due to stronger fiscal buffers and deeper non-oil sectors.” 

“It also matters greatly into which new sectors the economies are diversifying. For example, prolonged instability could dampen investment and further disrupt tourism, aviation, and logistics sectors which have been expanding rapidly in the region. In contrast, sectors like banking and finance have been more insulated,” she explained. 

The commercial port of Yanbu is one of Saudi Arabia’s current key maritime gateways. (Mawani)

Energy Poverty

Gatti turned to the more severe dimension of energy market volatility, explaining that rising oil prices impose compounded pressures on developing importing countries, as they translate directly into higher electricity costs, more expensive public transportation, and rising food prices linked to increased fertilizer costs.

She noted that these pressures inevitably lead to wider trade deficits and greater strain on public budgets, particularly in poorer countries with limited reserves, which are forced to bear significant fiscal costs if they attempt to subsidize energy prices to ease the burden on citizens.

Gatti further noted that reliable and affordable energy is not merely a service, but a lifeline for both households and firms. In this context, volatility in fuel and gas markets delivers a “double hit” to these economies, as households struggle to meet basic needs while firms face more expensive and less reliable energy, making industrial expansion slower, riskier, and less competitive.

In this sense, sharp short-term price increases may not only have immediate effects, but could also disrupt long-term structural transformation in energy-poor developing economies, she told Asharq Al-Awsat.

“The resilience of economies to withstand oil and gas shocks depends on exposure and vulnerability of their economic structures. Degree of reliance on imported energy matters, and so do reliance on energy-intensive sectors, and how consumers, firms, and government adapt to rising prices,” she remarked.

The 'Cost' of Alternative Energy Routes

Addressing the need to invest in land corridors or pipelines that bypass narrow maritime chokepoints, Gatti said the decision requires a careful balance between economic efficiency and resilience. “Decisions on such investments must balance consideration for economic efficiency and resilience to shocks. The concentration of oil and gas export routes from the Gulf through the Strait of Hormuz suggests that this is likely the most economically efficient option, given geography and other technical and economic considerations. On the other hand, diversifying trade routes brings resilience to shocks.”

For example she highlighted that Saudi Arabia can “divert a portion of their oil exports to the Red Sea port of Yanbu via the East-West pipeline, with 7mbpd capacity. The UAE similarly has Habshan-Fujairah pipeline with 1.5-1.8mbpd capacity to bypass Hormuz.

Conversely, the Kirkuk–Ceyhan pipeline between Iraq and Türkiye can carry only about 0.4 mbpd, well below its 1.5 mbpd intended capacity, because of the delayed repairs needed for the segment within Iraq.”

The End of the 'Efficiency-Only' Era

On supply chain resilience, Gatti said the world is undergoing a severe test that began with the COVID-19 pandemic and has extended to regional conflicts, events that have exposed the fragility of excessive reliance on geographically concentrated production networks.

She stressed that the key lesson from these crises is that “efficiency alone is no longer enough,” as governments and companies increasingly need to build buffers, diversify sources, increase inventories of critical goods, and develop more flexible logistics systems.

She also pointed to the current analytical frameworks and extensive research to support countries in this transition, referring to the World Development Report 2020, which examined the challenges facing developing countries in the era of global value chains.

She also noted an upcoming report titled “Resources to Resilience: Economic Diversification for Oil and Gas Exporters in MENAAP,” which will provide a roadmap for exporters in the Middle East, North Africa, and Asia-Pacific on how to diversify their economic capabilities to navigate disruptions in maritime corridors and sudden shocks.