His Excellency the Minister of Finance and Chairman of the Board of Directors of the National Debt Management Center, Mr. Mohammed bin Abdullah Al-Jadaan, officially approved the Kingdom of Saudi Arabia’s annual borrowing plan for the fiscal year 2026. This approval followed the National Debt Management Center’s board of directors’ ratification of the plan, which outlines the Kingdom’s fiscal and financing policy for the coming period, in line with its financial sustainability objectives.
Details of funding needs in numbers
The approved plan revealed the projected funding needs for 2026, estimated at approximately 217 billion Saudi Riyals . These needs were divided to cover two main areas:
- Financing the budget deficit: The largest portion of the financing, estimated at approximately 165 billion riyals, is allocated to cover the expected deficit in the state’s general budget for the year 2026, according to the preliminary budget statement issued by the Ministry of Finance.
- Debt principal repayment: Approximately 52 billion riyals have been allocated to repay principal debt due during the same year.
Strategy to diversify funding sources and expand the investor base
The plan affirmed the Kingdom's continued commitment to its strategic approach of maintaining public debt sustainability by diversifying funding sources across domestic and international markets. It aims to broaden the investor base through both public and private channels, including the issuance of bonds, sukuk, and loans, while ensuring fair financing costs that reflect the strength of the Saudi economy.
The plan also included a review of the 2026 Saudi Riyal-denominated local Sukuk program issuances, which enhances the depth of local debt markets and provides safe investment opportunities for the financial and banking sector within the Kingdom.
The economic context and support for the goals of Vision 2030
The adoption of this plan comes in an economic context characterized by increased government spending directed towards major development projects and the Kingdom’s Vision 2030 initiatives. The Kingdom resorts to carefully considered borrowing not only to cover the deficit, but also as a financial tool to enable the acceleration of the implementation of strategic projects aimed at diversifying the economy away from oil.
The shift towards alternative government financing, as outlined in the plan, reflects an evolution in public financial management. Project and infrastructure financing will be expanded through export credit agencies, both in 2026 and in the medium term. These operations will be conducted within rigorous risk management frameworks, ensuring efficient spending and achieving the desired economic returns.
The importance of public debt sustainability
The plan demonstrates the Kingdom's commitment to fiscal discipline, with the National Debt Management Center monitoring public debt levels to ensure they remain within safe limits relative to GDP. This approach contributes to strengthening the Kingdom's credit rating with international agencies, facilitating access to global capital markets on favorable terms, and boosting foreign investor confidence in the Saudi economy.
