Saudi Arabia’s Vision 2030 aspirations could be coming into contact with a frigid fiscal reality. Fitch Ratings cautioned on Friday that Riyadh is facing increasing financial risks as oil prices moderate and government expenditures swell, jeopardizing the kingdom’s fiscal consolidation plans.
The figures speak for themselves: Saudi Arabia now anticipates a budget deficit of 5.3% of GDP in 2025—almost doubling its initial 2.3% projection—before easing to 3.3% in 2026. Weakening oil revenues account for most of the decline, Fitch stated, with non-oil revenues resisting but not sufficient to cover the gap. The rating agency cited revenue shortfalls and government overspending as the prime offenders, citing the sheer capital expenditures demanded by mammoth projects such as NEOM.
This week’s pre-budget statement from Riyadh signaled a shift toward tighter fiscal discipline, but Fitch noted the tension between Saudi Arabia’s promises of restraint and its reliance on the Public Investment Fund’s trillion-dollar Vision 2030 agenda. That tension is only magnified by sliding crude prices, with Brent down more than 7% this week on speculation of further OPEC+ supply hikes.
Those hikes are themselves controversial. Reuters sources have tossed around the possibility that Saudi Arabia desires much larger increases in quotas than Russia, steps which could regain market share but further strain oil prices. OPEC already responded furiously to the newswire, calling half-million-barrel higher reports “wholly inaccurate.” But the conflict shows the stakes: Saudi Arabia’s financial well-being is tied to an orderly oil market, but its production policy is set up to protect long-term viability at the cost of lower near-term prices.
Fitch noted that fiscal consolidation would come eventually in the form of modest cuts in spending, steady oil revenues, and sustained growth in non-oil revenues. But the kingdom’s vulnerability to fluctuating oil prices is still clear. Vision 2030 is intended to end the reliance on crude, but for the time being, Saudi Arabia’s ledgers are still held hostage to it.
