Saudi Economy Remains Resilient on Oil Strength, Diversification

Saudi Arabia's economy is on track to remain resilient, driven by strong oil sector infrastructure and continued economic diversification. According to Al Rajhi Capital, a leading financial services provider in Saudi Arabia, revenues are projected to rise 1% in 2027 to SAR1.2 trillion ($314 billion), while government spending is expected to fall 3% to SAR1.4 trillion ($367 billion). As a result, the fiscal deficit is projected to narrow to SAR191 billion, equivalent to 3.6% of GDP, from 4.9% in 2026.

The fiscal deficit for 2026 was estimated at SAR245 billion - equivalent to 4.9% of GDP - which exceeds the original budget estimate of SAR165 billion but remains below the 5.8% recorded in 2025. The deficit is expected to continue narrowing, reaching 3.1% in 2028 and slightly increasing to 3.3% in 2029.

Al Rajhi Capital's report also highlights the kingdom's construction activity, which expanded for the fourth straight month in August, driven by resilient demand conditions and a sustained recovery in new orders. The seasonally adjusted Alrajhi capital Saudi Construction Index climbed to 55.4 in August from 55.2 in July.