Saudi Arabia's borrowing plan for 2026 forecasts a slowdown in the growth of international bond issuances as the kingdom adopts a more cautious approach to spending amid lower oil prices, analysts say.
Total financing needs this year are projected at $58 billion, the Ministry of Finance said on Friday. This includes $44 billion to cover the anticipated deficit and $14 billion for principal repayments.
International bond sales are expected to account for around 25 per cent to 30 per cent of total borrowing, or between $14 billion to $18 billion, “which if borne out would mark a slowdown in the rapid expansion of international issuance seen over the past several years”, Emirates NBD economists Edward Bell and Daniel Richards said in a note on Monday.
“Saudi Arabia remains committed to its Vision 2030 diversification programme, but officials have signaled a more cautious approach as lower oil prices have constrained budgets.”
In 2025, the government had planned to borrow 139 billion riyals ($37 billion) but ended up raising more than 400 billion riyals, the bank said. The kingdom did clarify that 61 billion riyals represented “pre-funding” for 2026 needs.
Saudi Arabia this year "aims to maintain debt sustainability, diversify funding sources between domestic and international markets through public and private channels by issuing bonds, sukuk, and loans at a fair cost", the ministry statement said.
"It also plans to expand alternative government funding, through project and infrastructure financing, as well as export credit agencies, during fiscal year 2026 and over the medium term, within prudent risk management frameworks and well-established foundations."
Last month, Saudi Arabia approved its budget for next year with spending of 1.31 trillion Saudi riyals and an estimated deficit of 165.4 billion riyals.
Emirates NBD projects Saudi Arabia's budget deficit this year will be closer to 5 per cent of its gross domestic product as compared to 3 per cent forecast by the government.
“Oil revenue will dip thanks to lower prices this year even as Saudi Arabia will keep production at more than 10 million barrels per day, while we expect a more modest rise in non-oil income than presented in the 2026 budget,” the note said.
Oil prices are expected to remain under pressure this year after both benchmarks fell nearly 20 per cent in 2025 on oversupply concerns.
Saudi Arabia is pushing to reform its economy and cut its reliance on the sale of hydrocarbons to generate its revenue as part of its Vision 2030 programme. It is spending heavily in sectors including infrastructure, real estate, tourism to develop projects and support the growth of its non-oil economy.
Its economy is forecast to grow at 4 per cent in 2026, similar to last year’s projections made by the International Monetary Fund, driven by higher oil production and strong domestic demand linked to the kingdom's reforms.
Saudi Arabia’s non-oil private sector economy continued to expand in December albeit at a slower pace, driven by rise in business activity and new orders.
The seasonally adjusted Riyad Bank Purchasing Managers Index for the Arab world's biggest economy fell for a second month in a row to 57.4 in December, from 58.5 in November, well above the 50 mark that separates growth from contraction.
“Saudi Arabia’s non-oil private sector closed the year with a solid expansion … with activity continuing to expand despite some loss of momentum,” Naif Al-Ghaith, chief economist at Riyad Bank, said.
“Output growth remained solid, supported by sustained domestic demand, project approvals, and continuing business investment, even as the pace of growth eased to its slowest since August.”
The volume of new orders received by companies also rose sharply last month amid an improvement in the economy and winning new contracts and clients, the report said. However, the pace of growth eased to its softest since August.
Companies also boosted hiring activity as output levels and new orders surged, with the employment growth remaining strong in December but softer than the peak recorded in October.
However, input prices increased again in December, with the inflation rate accelerating due to a rise in purchase costs.
“Looking ahead, business sentiment softened despite remaining positive,” Mr Al-Ghaith said.
“The Future Output Index stayed above the neutral mark, indicating expectations of growth into 2026, but fell to its lowest level since July, reflecting more cautious confidence.”
