Saudi Arabia sees stable to lower international bond sales in 2026, signaling a possible halt to three years of rapid growth in borrowing activities that have made the kingdom one of the busiest sovereign issuers in global emerging markets.
The Ministry of Finance approved borrowing plans for the year that equate to selling about $14 billion to $20 billion in international bond markets, according to the National Debt Management Center. That would be roughly on par with 2025 at the high end and the lowest since 2022 on the low end, should the kingdom make good on its targets.
Total financing needs are expected to drop to $58 billion from $107 billion last year, when the kingdom more than doubled its initial budget deficit estimate — to 5.3%. The fiscal shortfall this year is projected to contract to 3.3% of GDP.
The government often overshoots on its economic goals and borrowed in excess of its initial 2025 plan last year. Indeed, Goldman Sachs Group Inc. has predicted the Saudis will issue a record $25 billion of international debt this year, while Bank of America has said it sees stronger diversification of the funding mix into instruments such as syndicated loans.
Saudi Arabia has widely telegraphed plans to continue borrowing to plug a fiscal gap stemming from a combination of lower oil revenues and elevated spending on Crown Prince Mohammed bin Salman’s $2 trillion economic diversification agenda. But Finance Minister Mohammed Al-Jadaan hinted recently that the kingdom could take a more cautious stance on the pace of issuance, saying the sovereign is “very careful” not to oversupply the market.
For 2026, Saudi Arabia’s focus will be on dollar-denominated debt in international markets, with flexibility to issue in other currencies, the NDMC said. Still, net issuance in US dollar public markets is expected to drop as the government continues to diversify funding including in private markets, it added.
More than half of total financing activities last year were done via private markets, while less than 20% was made up of international sales, according to the NDMC. The rest was via local public markets.
Similarly for 2026, the government intends to tap private markets for as much as 50% of its total expected financing needs. The remainder will be financed through a mix of international and local markets. That would cover this year’s expected budget deficit, in addition to principal repayments.
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