Saudi Arabia’s non-oil revenue surpassed oil revenue in the third quarter of 2026 for the first time since 2020, highlighting progress in diversifying government income and strengthening the budget’s resilience to energy market volatility.
The shift came as the Kingdom continued to control spending and allocate resources according to priorities, while maintaining funding for essential services and development projects in support of Vision 2030.
According to the Saudi Ministry of Finance, total revenue fell 4% year on year to SAR 259.1 billion ($69.1 billion) in the third quarter, while expenditure declined by the same percentage to SAR 343.4 billion ($91.6 billion), resulting in a deficit of SAR 84.3 billion ($22.5 billion).
For the first nine months of the year, revenue totaled SAR 858.9 billion ($229 billion), against expenditure of SAR 1.103 trillion ($294.2 billion), representing about 84% of the approved annual budget of SAR 1.3128 trillion.
Non-oil revenue strengthens revenue diversification
Non-oil revenue rose 20% in the third quarter to SAR 142.6 billion ($38 billion), helping offset a 23% decline in oil revenue to SAR 116.5 billion ($31.1 billion).
Over the first nine months, non-oil revenue reached SAR 412.5 billion ($110 billion), up 8% year on year, reflecting the expanding government revenue base and the growing contribution of non-oil sources to public finances.
Among non-oil revenue components, other revenue recorded the strongest growth in the third quarter, rising 68% to SAR 49.1 billion ($13.1 billion), from approximately SAR 29.3 billion a year earlier.
Taxes on international trade and transactions increased 26% to SAR 7.2 billion ($1.9 billion), while taxes on income, profits and capital gains rose 16% to SAR 7.7 billion ($2.1 billion). Taxes on goods and services totaled SAR 75.2 billion ($20.1 billion).
Essential and development sectors
Health and social development accounted for the largest share of cumulative government spending through the end of the third quarter, receiving SAR 230.8 billion ($61.5 billion), or 89% of the sector’s allocated budget.
The military sector ranked second, with spending of SAR 187.5 billion ($50 billion), followed by education at SAR 159.3 billion ($42.5 billion) and security and regional administration at SAR 99.4 billion ($26.5 billion).
Spending on economic resources reached SAR 75.7 billion ($20.2 billion), up 11% from the same period last year, reflecting continued allocation of resources to economic and development-related activities.
The figures show that funding for priority sectors was maintained despite the decline in overall quarterly expenditure, underscoring the importance of managing spending and balancing operational needs with development priorities.
Reserves and debt management
Saudi Arabia’s general reserve balance stood at SAR 399.5 billion ($106.5 billion) at the end of the third quarter, while the current account balance reached SAR 50.8 billion ($13.5 billion).
Total public debt amounted to approximately SAR 1.774 trillion ($473 billion), comprising SAR 1.136 trillion ($302.9 billion) in domestic debt and SAR 637.6 billion ($170 billion) in external debt.
New debt issuance during the period totaled SAR 298.3 billion, as part of efforts to finance the planned budget deficit, manage funding requirements and support development and strategic projects.
Dr. Salem Baajajah, professor of economics at King Abdulaziz University, told Asharq Al-Awsat that the first nine months of 2026 reflected the government’s continued support for economic activity and development projects, with expenditure rising 8% to approximately SAR 1.1 trillion, compared with revenue growth of 3% to SAR 858.9 billion.
The widening gap between revenue and expenditure underscored the need to balance development spending with fiscal sustainability, he explained.
Government expenditure remains an important driver of growth by financing projects and infrastructure, supporting non-oil sectors and strengthening the private sector’s contribution to economic activity, Baajajah noted.
However, the next phase requires greater emphasis on spending efficiency and maximizing the economic returns of projects to ensure their long-term development impact.
Baajajah stressed that assessing fiscal performance should go beyond revenue and expenditure growth rates to examine revenue sources, the size of the deficit and how it is financed, and the extent to which spending generates economic growth and jobs.
Overall, the third-quarter results reflect a two-pronged approach to fiscal management: expanding non-oil revenue to broaden the income base while aligning expenditure with available resources, without neglecting essential sectors or development projects.
This approach strengthens the budget’s ability to withstand fluctuations in oil revenue while supporting economic diversification targets and maintaining fiscal discipline.
