Saudi Budget Forum Reveals Govt. Spending Now Independent of ‘Oil Cycle’

Saudi Finance Minister Mohammed al-Jadaan and Economy Minister Faisal Alibrahim attend the Saudi Budget Forum (Saudi 2026 Budget Forum)
Saudi Finance Minister Mohammed al-Jadaan and Economy Minister Faisal Alibrahim attend the Saudi Budget Forum (Saudi 2026 Budget Forum)
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Saudi Budget Forum Reveals Govt. Spending Now Independent of ‘Oil Cycle’

Saudi Finance Minister Mohammed al-Jadaan and Economy Minister Faisal Alibrahim attend the Saudi Budget Forum (Saudi 2026 Budget Forum)
Saudi Finance Minister Mohammed al-Jadaan and Economy Minister Faisal Alibrahim attend the Saudi Budget Forum (Saudi 2026 Budget Forum)

Saudi Arabia’s 2026 budget forum, held a day after the Cabinet approved the new fiscal plan under the chairmanship of Crown Prince and Prime Minister Mohammed bin Salman, served as a high-level platform to explain the budget’s objectives and strategic direction.

Officials said the budget aims to balance fiscal prudence with the acceleration of Vision 2030’s third phase, intensifying efforts to implement its programs and projects to deliver sustainable economic and social impact.

The Crown Prince has repeatedly stressed that citizens’ welfare remains the government’s top priority.

The Cabinet approved the 2026 budget on Tuesday with total spending of 1.31 trillion riyals ($349.3 billion) and projected revenues of 1.15 trillion riyals ($306 billion), implying a deficit of 165 billion riyals ($43.9 billion).

Finance Minister Mohammed al-Jadaan said the government had overcome a key structural challenge by ending the link between public spending and oil price cycles. “Expenditure is now increasing in a studied, deliberate manner, away from the volatility of the oil sector,” he said.

Economy and Planning Minister Faisal Alibrahim said the kingdom is entering a new phase in which artificial intelligence will become the main driver of non-oil growth, reshaping the economy.

Technology, he said, will amplify economic returns and allow Saudi companies such as HUMAIN to play a leading role in the future economy, similar to the role Aramco played in the energy sector.

Officials said this approach is part of a broader strategy to strengthen institutional capacity and expand private-sector partnerships to sustain the momentum of non-oil growth, projected to remain between 4.5 and 6 % in coming years.

Fiscal Policy Shift: Spending Decoupled from Oil

At the forum’s opening session, al-Jadaan outlined a new fiscal policy designed to delink spending from oil-revenue fluctuations — a structural reform marking a turning point in Saudi financial management.

“The biggest challenge in previous years was that spending moved in line with the economic cycle,” he said. “Under the current policy, spending now grows in a disciplined and planned way.”

He said the shift ensures steady non-oil growth regardless of oil-market swings. The minister noted that the oil sector had recorded “negative growth for eight years,” underscoring the need for this policy change.

Al-Jadaan added that the government has capped public debt at 40 % of GDP and expects non-oil revenues this year to reach 501 billion riyals ($133.4 billion), accounting for almost 46 % of total revenues — the highest share in five years.

He said debt levels were not a concern “as long as returns exceed costs,” adding: “Debt in itself is not good on a personal level, and the same applies to the state — but there are exceptions.”

He stressed that “the government’s goal is not to raise taxes but to expand the size of the economy.”

Economic Transformation Delivering ‘Large Real Returns’

Alibrahim said Vision 2030’s transformation drive is producing “very large real returns,” reflected in strong growth across sectors. He emphasized that quality growth, not just quantity, will define the next stage.

He said 74 economic activities have grown by more than 5 % annually over the past five years, while 37 have expanded by over 10%. “The non-oil economy is now the foundation of sustainable growth,” he said, noting that cumulative growth since 2015 has exceeded 30% and reliance on oil revenues has fallen from 90 to 68%.

Non-oil growth is expected to average between 4.5 and 6% annually in the coming years.

Private-sector participation, he said, remains essential to sustaining this trajectory. Its contribution to GDP has risen from 30 to 50%, with further room for expansion “provided projects are executed at the right cost.”

Alibrahim said hundreds of international firms have entered the Saudi market, and domestic investment has surged, showing the kingdom’s progress in building a competitive business climate. “Opening long-term opportunities for the private sector is crucial to creating quality jobs and achieving sustainable growth,” he said.

He estimated that infrastructure investment needs would reach 3.5 trillion riyals over the next decade, calling infrastructure “one of the fastest-growing asset classes globally.”

The minister said artificial intelligence will power the next phase of economic diversification, boosting productivity, maximizing returns, and attracting global talent and technology firms. He cited HUMAIN, a Public Investment Fund- and Aramco-backed firm, as poised to take a pioneering role in the future economy “just as Aramco did for decades in energy.”

Foreign Property Ownership and Housing

Housing Minister Majed al-Hogail said the government will begin implementing a new law next month allowing foreigners to own property in Saudi Arabia. The legislation, he said, is intended to bring balance to the real-estate market through the white-land fee policy.

He said development housing programs for low-income families had enabled more than 50,000 households to acquire homes and protect over 16,000 families from default.

Al-Hogail said the Finance Ministry and the central bank had provided 46.6 billion riyals to inject liquidity into housing programs. More than 250,000 citizens benefited from mortgage guarantees for those with financial challenges.

He said over 20,000 rental contracts have been signed under market-balancing initiatives, with plans to add 60,000 housing units next year and 100,000 under off-plan sales. The housing program aims to grant ownership to 20,000 families by 2026.

Logistics Hub Ambitions

Transport and Logistics Minister Saleh al-Jasser said Saudi Arabia is witnessing a major transformation toward becoming a global logistics hub and a model of integrated mobility.

Private-sector investment in transport and logistics has exceeded 280 billion riyals across aviation, maritime, rail, and road services, he said.

The aviation sector, he added, is expanding rapidly with more than 500 aircraft on confirmed order for national carriers. Passenger routes have increased to 172 from 100 before the pandemic, with a target of 250 by 2030.

Projects include expanding King Abdulaziz Airport, building King Salman Airport, opening new airports in Jazan and Jouf, and launching an additional national carrier in the Eastern Province.

Air-freight volumes grew 30% last year, with a goal of surpassing 3.5 million tons by 2030. The rail network now spans 6,000 kilometers, with plans to double its length, move 30 million tons of freight and 10 million passengers, and add 10 new passenger trains.

Building a World-Class Labor Market

Human Resources and Social Development Minister Ahmed al-Rajhi said Saudi Arabia is crafting a new strategy to make its labor market among the best globally.

He said the 2020 Labor Market Strategy introduced 28 reform initiatives, 94% of which have been implemented. His ministry participates in eight of the 11 Vision 2030 programs and has completed most of its 100 related initiatives.

The number of Saudis working in the private sector rose from 1.7 million to 2.5 million in four years, he said. Engineering jobs grew from 52,000 to 218,000 Saudi nationals, and freelance work expanded to 430,000 workers nationwide.

Tourism Growth

Deputy Tourism Minister Princess Haifa Al Saud said the number of visitors to the kingdom reached 116 million, with spending totaling 275 billion riyals.

Tourists from Europe accounted for 14% of arrivals and those from East Asia and the Pacific 15%. Domestic tourism spending climbed to 105 billion riyals by the end of the third quarter of 2025, up 18% year-on-year, reflecting the sector’s growing role in diversifying revenue sources.

Defense Industries and Localization

General Authority for Military Industries Governor Ahmed al-Ohali said the sector has undergone a major transformation over the past six years, driven by regulatory reforms and investment incentives.

He said the number of licensed defense companies jumped from fewer than five in 2018 to more than 340 in 2024, while local military spending rose from 4 to 25% of total outlays and local content reached 40%.

 

 



Saudi Aramco Achieves 70% Local Content Target through iktva Program

Saudi Aramco Achieves 70% Local Content Target through iktva Program
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Saudi Aramco Achieves 70% Local Content Target through iktva Program

Saudi Aramco Achieves 70% Local Content Target through iktva Program

Saudi Aramco announced on Wednesday that its supply chain transformation program, iktva (In-Kingdom Total Value Add), has achieved its target of reaching 70% local content.

Building on this milestone, the company said that it plans to increase local content in its goods and services procurement to 75% by 2030.

Since its launch, the iktva program has contributed more than $280 billion to the Kingdom’s gross domestic product, reinforcing its role as a key driver of industrial development, economic diversification, and long-term financial resilience.

Through the localization of goods and services, the program has strengthened the resilience and reliability of Aramco’s supply chains, enhanced operational continuity, reduced supply chain vulnerabilities, and provided protection against global cost inflation - capabilities that proved critical during periods of disruption.

Aramco President and CEO Amin Nasser expressed pride in the scale of transformation achieved through iktva and its positive impact on the Kingdom’s economy, noting that the announcement represents a major milestone in the program’s journey and reflects a significant leap in Saudi Arabia’s industrial development, fully aligned with the Kingdom’s national vision.

“iktva is a core pillar of Aramco’s strategy to build a competitive national industrial ecosystem that supports the energy sector while enabling broader economic growth and creating thousands of job opportunities for Saudi nationals,” he stressed.

By localizing supply chains, the program ensures operational reliability and mitigates disruptions that may affect global supply chains, he added, noting that its cumulative impact over a decade demonstrates the sustained value it continues to generate.

Over the past decade, iktva has emerged as a leading example of supply-chain-driven economic transformation, converting Aramco’s project spending into domestic economic multipliers that have created jobs, improved productivity, stimulated exports, and strengthened supply chain resilience.

The program has identified more than 200 localization opportunities across 12 key sectors, representing an annual market value of $28 billion. These opportunities have translated into tangible investment outcomes, catalyzing more than 350 investments from 35 countries in new manufacturing facilities within the Kingdom, supported by approximately $9 billion in capital. These investments have enabled the local manufacture of 47 strategic products in Saudi Arabia for the first time.

iktva has also contributed to the creation of more than 200,000 direct and indirect jobs across the Kingdom, further strengthening the local industrial base and national capabilities. To support continued growth, the program organized eight regional supplier forums worldwide in 2025, in addition to its biennial forum. These events helped connect global investors, manufacturers, and suppliers with localization opportunities in Saudi Arabia.


AirAsia X Unveils Kuala Lumpur-Bahrain-London Route

FILE PHOTO: Planes from AirAsia are seen on the tarmac of Kuala Lumpur International Airport Terminal 2 (KLIA2) in Sepang, Malaysia, February 26, 2024. REUTERS/Hasnoor Hussain/File Photo
FILE PHOTO: Planes from AirAsia are seen on the tarmac of Kuala Lumpur International Airport Terminal 2 (KLIA2) in Sepang, Malaysia, February 26, 2024. REUTERS/Hasnoor Hussain/File Photo
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AirAsia X Unveils Kuala Lumpur-Bahrain-London Route

FILE PHOTO: Planes from AirAsia are seen on the tarmac of Kuala Lumpur International Airport Terminal 2 (KLIA2) in Sepang, Malaysia, February 26, 2024. REUTERS/Hasnoor Hussain/File Photo
FILE PHOTO: Planes from AirAsia are seen on the tarmac of Kuala Lumpur International Airport Terminal 2 (KLIA2) in Sepang, Malaysia, February 26, 2024. REUTERS/Hasnoor Hussain/File Photo

Malaysian budget carrier AirAsia X on Wednesday unveiled plans to resume flights from Kuala Lumpur to London via a new hub in Bahrain, using the extended range of narrow-body jets to stitch fresh routes alongside established carriers.

The service, due to start in June, would make Bahrain AirAsia X's first hub outside Asia, placing it within reach of busy markets in Southeast Asia, the Middle East and Europe.

It also marks a ‌return to ‌the British capital more than a decade after the airline suspended ‌non-stop ⁠flights from Kuala Lumpur ⁠and retired its Airbus A340 jets.

Co-founder Tony Fernandes said Bahrain could become a regional gateway for underserved secondary cities across Asia, Africa and Europe.

"While ... of course London is a very emotional destination for many people in Southeast Asia, the real aim is to have a bunch of A321s flying maybe 15 times a day to Bahrain," he told Reuters in an interview.

"From Bahrain, you connect to Africa and Europe with a big emphasis ⁠on creating connectivity that doesn't exist."

The move follows Asia's ‌largest low-cost carrier completing its acquisition of the short-haul ‌aviation business from parent Capital A, bringing the group's seven airlines under one umbrella.

Fernandes, also CEO ‌of Capital A, stressed the importance of the Airbus A321XLR, an extra-long-range narrow-body aircraft ‌he said would let the airline replicate its Asian low-cost model on intercontinental routes.

"That aircraft enables me to start thinking we can do what we did in Asia to Europe and Africa," he said, citing potential secondary routes such as Penang to Cologne or Prague.

AirAsia plans to ‌redeploy its larger A330s to longer routes while building up the Bahrain hub, with possible African destinations including the Maghreb region, Egypt, ⁠Morocco, Tanzania and Kenya. ⁠A Bangkok-to-Europe route is also under consideration.

Fernandes played down direct competition with Gulf carriers such as Emirates and Qatar Airways, positioning AirAsia X as a budget option aimed at a different market.

"I'm all about stimulating a new market," he said. "We've got into our little playground (of) 3 billion people, most of them have not been to Europe."


Von der Leyen: EU Must 'Tear Down Barriers' to Become 'Global Giant'

(FILES) European Commission President Ursula von der Leyen delivers a speech in Brussels, on January 22, 2026. (Photo by NICOLAS TUCAT / AFP)
(FILES) European Commission President Ursula von der Leyen delivers a speech in Brussels, on January 22, 2026. (Photo by NICOLAS TUCAT / AFP)
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Von der Leyen: EU Must 'Tear Down Barriers' to Become 'Global Giant'

(FILES) European Commission President Ursula von der Leyen delivers a speech in Brussels, on January 22, 2026. (Photo by NICOLAS TUCAT / AFP)
(FILES) European Commission President Ursula von der Leyen delivers a speech in Brussels, on January 22, 2026. (Photo by NICOLAS TUCAT / AFP)

The EU must "tear down the barriers" that prevent it from becoming a truly global economic giant, European Commission chief Ursula von der Leyen said Wednesday, ahead of leaders' talks on making the 27-nation bloc more competitive.

"Our companies need capital right now. So let's get it done this year," the commission president told EU lawmakers as she outlined key steps to bridging the gap with China and the United States.

"We have to make progress one way or the other to tear down the barriers that prevent us from being a true global giant," she said, calling the current system "fragmentation on steroids."

Reviving the moribund EU economy has taken on greater urgency in the face of geopolitical shocks, from US President Donald Trump's threats and tariffs upending the global trading to his push to seize Greenland from Denmark.

AFP said that Von der Leyen delivered her message before heading with EU leaders including France's Emmanuel Macron and Germany's Friedrich Merz to a gathering of industry executives in Antwerp, held on the eve of a summit on bolstering the bloc's economy.

A key issue identified by the EU is the fact that European companies face difficulties accessing capital to scale up, unlike their American counterparts.

To tackle this, Plan A would be to advance together as 27 states, von der Leyen said, but if they cannot reach agreement, the EU should consider "enhanced cooperation" between those countries that want to.

Von der Leyen said Europe should ramp up its competitiveness by "stepping up production" on the continent and "by expanding our network of reliable partners", pointing to the importance of signing trade agreements.

After recent deals with South American bloc Mercosur and India, she said more were on their way -- with Australia, Thailand, the Philippines and the United Arab Emirates.

One of the biggest -- and most debated -- proposals for boosting the EU's economy is to favor European firms over foreign rivals in "strategic" fields, which von der Leyen supports.

"In strategic sectors, European preference is a necessary instrument... that will contribute to strengthen Europe's own production base," she said -- while cautioning against a "one-size-fits-all" approach.

France has been spearheading the push, but some EU nations like Sweden are wary of veering into protectionism and warn Brussels against going too far.

The EU executive will also next month propose the 28th regime, also known as "EU Inc", a voluntary set of rules for businesses that would apply across the European Union and would not be linked to any particular country.

Brussels argues this would make it easier for companies to work across the EU, since the fragmented market is often blamed for why the economy is not better.

The commission is also engaged in a massive effort to cut red tape for firms, which complain EU rules make it harder to do business -- drawing accusations from critics that Brussels is watering down key legislation on climate in particular.