The cabinet spent part of Tuesday’s session on the preliminary budget estimates for the coming fiscal year, with ministers pointing to policies that, in the session’s words, “help meet national targets and sustain spending on services and on development and social priorities while maintaining fiscal sustainability.” Within a day, two of the institutions that price Saudi risk for the outside world published their own arithmetic on the same plan. Read together, the three sets of numbers describe one economy and one disagreement.
The Finance Ministry’s pre-budget statement, released at the end of September, estimates the economy will contract 3.6 percent this year, with oil activity down 21.8 percent and non-oil activity up 3.2 percent, before growing 12.8 percent in 2027. The World Bank’s new regional update, published this week, puts the contraction at 2.0 percent and the rebound at 7.9 percent. Moody’s, assessing the pre-budget statement on Tuesday, lands between the two on the recovery at 8.5 percent, with a 3.3 percent contraction this year.
The spread is informative because of where it is not. None of the three disputes the shape of the year: oil receipts fell, spending held, and the non-oil economy kept growing through a regional war. The World Bank has cut its 2026 forecast from the 3.1 percent growth it expected in April, and raised its 2027 number from 4.9 percent, a swing that tracks the war’s actual path through export infrastructure rather than any domestic variable. Its update credits the East-West pipeline, now moving about four fifths of its expanded capacity to Yanbu, as the reason Saudi exports recovered while the wider Gulf’s did not; it sees the GCC economies contracting 4.3 percent in aggregate this year. The disagreement between 7.9, 8.5 and 12.8 percent is in practice a disagreement about how fast export volumes return next year, not about the domestic economy underneath.
The fiscal arithmetic is blunter. The pre-budget statement raised this year’s expected deficit to SR245 billion, or 4.9 percent of GDP, from the SR165 billion originally budgeted, with spending running 9 percent above plan at SR1.435 trillion against revenue of SR1.190 trillion. That revision is the measured cost of the year: the state chose to hold spending through the shock rather than cut into the project pipeline. For 2027, Moody’s expects spending to step back about 3 percent to SR1.392 trillion and the deficit to narrow to SR191 billion, or 3.6 percent of GDP. Those are the plan’s own figures. The agency is not disputing the budget; it is discounting the growth number attached to it, which is a meaningfully smaller quarrel.
Moody’s also supplied the sentence that matters most for the Kingdom’s borrowing costs: a large near-term deficit, the agency wrote, “by itself, does not change its fundamental assessment of Saudi Arabia.” That is the balance sheet talking. Reserves, sovereign wealth and a debt ratio that remains low by any peer standard buy the state the option of running a 4.9 percent deficit through a war year without a ratings event. The identified risk is duration: a longer conflict that reaches oil infrastructure again would test revenue rather than resolve.
The practical reading is that the December budget, which converts these estimates into appropriations, arrives with outside assessors already reconciled to its logic. What separates the forecasts will be settled by data, not argument: monthly export volumes through Yanbu, the pace at which OPEC+ supply arrangements let Saudi barrels back into the market, and the Q3 national accounts due before year-end. Each print will move the outside numbers toward the ministry’s, or the ministry’s toward the outside. The slope of 2027 is being decided now, in barrels per day.