Saudi Arabia's Q1 2026 Budget Deficit Hits SAR 125.7B — Largest Since 2018; Vision 2030 Contracts Frozen

Analysis published on May 22 detailed Saudi Arabia's Q1 2026 fiscal results: the Kingdom recorded a deficit of SAR 125.7 billion (~$33.5 billion), the largest single-quarter shortfall since 2018. Government expenditure rose 20% year-on-year to SAR 386.69 billion, driven by a 26% surge in military spending related to the Iran war and a near-tripling of consumer subsidies as fuel and food costs rose. Oil revenues fell sharply as actual crude production collapsed to 6.77 million bpd — well below the OPEC+ quota of 10.291 million bpd — due to the Hormuz closure. The Ministry of Finance halted new contracts with Western consultancies and delayed payments on existing contracts pending special ministerial pre-approval. Key Vision 2030 mega-projects including core NEOM components have been delayed or downsized. The full-year 2026 deficit is projected at approximately SAR 165 billion (3.3% of GDP), though the Q1 figure alone already far exceeds that annual pace. The IMF downgraded Saudi Arabia's 2026 growth forecast by 1.4 percentage points to 3.1%.