Saudi Arabia said it will shrink its budget deficit for 2026, reflecting the kingdom’s struggles to adapt to lower oil prices.
Government spending has fueled a construction spree in recent years, as Saudi vies to shift its economy away from a dependency on fossil fuels.
But the price of oil has already fallen around 20% this year, with JPMorgan forecasting it will drop further in 2026 and 2027, limiting Riyadh’s capacity to spend. Regardless, Saudi officials have vowed to expand the kingdom’s oil exporting capacity, dismissing gloomy price forecasts. “The worry we have is not oil demand,” the country’s finance minister said this week.
