IMF welcomes recalibration of Saudi Arabia Vision 2030 spending

Kingdom's 2026 budget projects narrower fiscal deficit as finance minister expresses willingness to scale back on some megaprojects

Kristalina Georgieva, IMF managing director, with Saudi Arabia's Finance Minister Mohammed Al Jadaan, in Bali, Indonesia. AP

The International Monetary Fund on Thursday welcomed Saudi Arabia recalibrating its Vision 2030 spending as the kingdom seeks to narrow its fiscal deficit.

Saudi Arabia's Ministry of Finance this week unveiled the budget for next year. In it, the ministry projects Saudi Arabia's fiscal deficit will narrow to 165.4 billion riyals ($44 billion) in 2026 – or 3.3 per cent of its gross domestic product – from 245 billion riyals in 2025.

Public revenue is estimated at 1.147 trillion riyals. Saudi Finance Minister Mohammed Al Jadaan at the time said the deficit was “by design”, explaining the kingdom will have a deficit until 2028, media reported.

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The ministry said it remains focused on enhancing spending efficiency and improving quality of essential services while also continuing to implement gigaprojects and other strategies under Vision 2030.

Mr Al Jadaan said the kingdom would be willing to scale back on some of the gigaprojects.

“If we announce something and we need to adjust it, accelerate it and make it a priority more than others, or defer or cancel it, we will without blinking,” he said.

A representative for the IMF said it welcomes “the recalibration of Saudi Arabia's fiscal expenditures”.

“This will help ensure … a proper sequence of spending while maintaining fiscal and external sustainability,” Julie Kozack said.

She added it was also important that any fiscal policy avoid “pro-cyclicality” – meaning the kingdom's fiscal policy plays a buffering role rather than an amplifying one. “Part of that is to avoid magnifying the impact of lower oil prices on growth,” she said.

The fund currently projects Saudi Arabia's economy – the largest in the Arab world – to grow at a 4 per cent pace next year, driven by higher oil production and strong domestic demand linked to the kingdom's reforms.

Saudi Arabia's 2026 budget made no specific mention of gigaprojects like Neom, a project long at the heart of the Vision 2030. Mr Al Jadaan said any potential cancellation of the futuristic city will be up to the decision of the Public Investment Fund (PIF), which is leading Saudi Arabia's diversification efforts, Bloomberg reported.

The PIF is expected to announced its updated investment strategy early next year. PIF governor Yasir Al Rumayyan previewed this new strategy in September, saying the new long-term strategy will be a continuation from the original that stretches into 2040.

Mr Al Rumayyan also said at the time that Saudi Arabia is seeking to secure foreign investment as PIF deploys 80 per cent of its capital domestically.