Saudi Arabia issues dollar bonds and releases 2026 budget forecasts
Saudi Arabia plans to enter global debt markets by issuing dollar bonds divided into four tranches, according to the financial markets news service IFR, in a move that reflects the Kingdom’s continued efforts to diversify its sources of funding to support its major development projects.
Release details and initial pricing
According to reports, Saudi Arabia has begun marketing this bond issuance with varying maturities, including 3, 5, 10, and 30 years, offering multiple options for international investors. Initial pricing (IPT) for these tranches has been set at premiums to US Treasury yields, with the 3-year tranche priced at approximately 95 basis points and the 5-year tranche at 100 basis points.
As for longer maturities, the initial pricing for 10-year bonds was estimated at about 110 basis points above US bonds, while the pricing for the 30-year tranche reached 140 basis points, which reflects the attractiveness of Saudi credit in international markets despite fluctuations in global interest rates.
Economic context and public debt strategy
This move towards international debt markets is part of the National Debt Management Center's strategy in the Kingdom, which aims to secure financing needs at reasonable rates and with low risk. Like other major economies, Saudi Arabia resorts to issuing bonds not only to cover deficits but also to establish its own yield curve in international markets, making it easier for major Saudi companies to borrow in the future.
This move coincides with the government’s continued adoption of expansionary fiscal policies aimed at accelerating the implementation of mega-projects related to the Kingdom’s Vision 2030, such as NEOM, the Red Sea and Qiddiya projects, which require huge cash flows and high capital investments.
2026 Budget and Future Growth Prospects
In the context of medium-term fiscal planning, the Cabinet approved the Kingdom's budget indicators for 2026, with total revenues estimated at approximately SAR 1.147 trillion and expenditures at approximately SAR 1.313 trillion, indicating a projected deficit of SAR 165.4 billion. These estimates represent a 2% increase in spending compared to the 2025 budget, underscoring the commitment to continuing the expansionary approach.
This period marks the beginning of the third phase of Vision 2030, which focuses primarily on accelerating progress and intensifying implementation efforts on the ground. These efforts are reflected in economic forecasts, with the government projecting 4.6% economic growth in 2026, driven mainly by non-oil activities expected to grow by 5%, while GDP growth is estimated at 4.4% by the end of this year.
