RIYADH: Saudi Arabia recorded a budget deficit of SR84.3 billion ($22.38 billion) in the third quarter of 2026, as government expenditure exceeded revenue, according to the Ministry of Finance’s quarterly budget performance report released on Tuesday.

Government revenue reached SR259.1 billion during the three-month period, while expenditure stood at SR343.4 billion, resulting in a deficit of SR84.3 billion.

Oil revenue declined 23 percent year on year to SR116.5 billion in the third quarter, compared with SR150.8 billion in the same period last year. Non-oil revenue, meanwhile, increased 20 percent to SR142.6 billion.

The third quarter shortfall brought the cumulative budget deficit for the first nine months of 2026 to SR244.3 billion, with total government revenue reaching SR858.9 billion against expenditure of SR1.10 trillion.

Nine-month revenue increased 3 percent year on year, while government spending rose 8 percent. Oil revenue amounted to SR446.3 billion, down 1 percent from SR452.4 billion in the corresponding period of 2025. Non-oil revenue increased 8 percent to SR412.5 billion from SR382.7 billion.

The growth in non-oil income was supported by a 22 percent increase in other revenues to SR102 billion, while taxes on goods and services rose 4 percent to SR229.3 billion. Taxes on income, profit and capital gains increased 6 percent to SR28.6 billion.

On the expenditure side, financing expenses climbed 38 percent year on year to SR54.8 billion, while subsidies increased 49 percent to SR41.7 billion. Capital expenditure on non-financial assets rose 17 percent to SR137.6 billion.

Employee compensation remained the largest expenditure category, reaching SR435.8 billion, up 1 percent from a year earlier. Spending on goods and services increased 8 percent to SR239.8 billion.

Among government sectors, health and social development received the largest share of spending, at SR230.8 billion during the first nine months. Military expenditure stood at SR187.5 billion, while education spending amounted to SR159.3 billion.

The Ministry of Finance estimated full-year 2026 revenue at SR1.147 trillion and expenditure at SR1.313 trillion, projecting an annual budget deficit of SR165.4 billion.

In its pre-budget statement released in September, the ministry projected a fiscal deficit of SR191 billion, equivalent to 3.6 percent of gross domestic product, for 2027.