The Finance Ministry's pre-budget statement puts 2027 spending at SR1.39 trillion against revenue of SR1.20 trillion, a deficit equal to 3.6% of GDP, after preliminary estimates show real GDP contracting 3.6% in 2026 as oil activity falls 21.8% while non-oil activity grows 3.2%; the ministry projects real growth of 12.8% in 2027. Argaam puts the 2027 deficit at SAR 191 billion.
The government plans to spend SR1.39 trillion next year, even though oil activity dropped by 21.8%. This fiscal policy is helping to support the economy until oil production picks up again.
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Fifty-five thousand homes
Talaat Moustafa Group's Saudi subsidiary signed a preliminary agreement with PIF-owned ROSHN Group to form a joint company exploring a mixed-use development in Riyadh expected to comprise more than 55,000 residential units, alongside retail, commercial, hospitality, entertainment, healthcare and education facilities. TMG Saudi will hold 51% of the joint company and ROSHN 49%, following a 7 June memorandum of understanding under PIF's urban development and livability ecosystem, part of its 2026-2030 strategy and the Kingdom's 70% homeownership target.
The minority stake shows that PIF is bringing in execution expertise. Developers who want to win Saudi residential projects should focus on improving their delivery track record instead of just acquiring more land.
Furniture up, education down
Point-of-sale spending for the week ended 19 September broke down to show furniture and home supplies rising 11.4% to SAR 503.8 million and electronic devices up 5% to SAR 203.45 million, while education spending fell 42.8% to SAR 180.69 million and books and stationery fell 18.4% to SAR 113.31 million. Total spending was $3.44 billion, or SAR 12.92 billion, across 241.1 million transactions, with food and beverages down 9% to SAR 2.07 billion and restaurants and cafés down 6.7% to SAR 1.58 billion; economist Talat Hafiz linked the furniture rise to National Day promotional campaigns.
Education falling 42.8% while furniture rose 11.4% in the same week is a calendar effect in both directions, and it is why weekly retail data should be read by category rather than in total.
Surplus up, non-oil down
Trade surplus SR26.03bn (+328.8%) in May, but oil exports +19.5% to 75.6% of the total, while non-oil exports fell 26.1%.
The test isn't whether the surplus grows, it's whether it can grow when oil doesn't.
