Saudi Arabia’s Minister of Finance, Mohammed Al-Jadaan, has officially approved the Kingdom’s Annual Borrowing Plan for the 2026 fiscal year. The plan, endorsed by the Board of Directors of the National Debt Management Center (NDMC), outlines a total financing requirement of SR217 billion ($57.9 billion).
The move comes as the world’s leading oil exporter enters the “third phase” of its Vision 2030 program, shifting focus from initial economic reforms to maximizing the impact of large-scale developmental and infrastructure investments.
Allocation of Funds
The projected financing needs for 2026 are designed to address two primary financial obligations:
- Budget Deficit Coverage: Approximately SR165 billion will be used to bridge the anticipated fiscal gap for the year.
- Debt Repayment: Roughly SR52 billion is allocated for the repayment of debt principals maturing within the 2026 calendar year.
Despite the significant borrowing figure, the projected deficit for 2026 is expected to drop to approximately 3.3% of GDP, down from an estimated 245 billion riyals in 2025.
Financing Strategy and Market Mix
The NDMC has outlined a diversified strategy to maintain debt sustainability while expanding the Kingdom’s investor base. The funding will be secured through a mix of domestic and international markets:
|
Funding Source |
Estimated Contribution |
|---|---|
|
Domestic Debt Market |
20% – 30% |
|
International Debt Market |
25% – 30% |
|
Private Market/Alternative Financing |
Up to 50%
|
The strategy emphasizes the use of Sukuk (Islamic bonds), traditional bonds, and syndicated loans. Notably, the Kingdom has already initiated its 2026 activities by finalizing a $13 billion syndicated loan earlier this week to support power, water, and public utility projects.
Vision 2030: The Third Phase
Economic analysts suggest that the 2026 plan reflects a more “cautious and calculated” approach to sovereign issuance. Finance Minister Al-Jadaan recently noted that the sovereign is being careful not to oversupply the market, even as it continues to fund transformative projects.
By leveraging alternative financing channels—such as Export Credit Agencies (ECAs) and infrastructure-specific project financing—Riyadh aims to reduce its direct reliance on oil revenues while keeping its $925 billion sovereign wealth fund (PIF) focused on high-growth sectors like logistics and religious tourism.