Prime Minister Dr. Jafar Hassan has issued Directive No. 14 of 2025 for the preparation of the General Budget Law draft and the draft system for the organizational structures of ministries, departments, and governmental units for the 2026 fiscal year.
اضافة اعلان
The directive aims to ensure the budget law is submitted to the House of Representatives within the constitutional deadline before the end of next month and to collaborate with parliament to approve it before the end of 2025. This approach allows the government to commence implementation of new capital projects early in the fiscal year, for the first time.
During a cabinet session held in the capital governorate, the Prime Minister emphasized the government’s goal of approving the new budget this year to avoid delays in implementing capital projects at the start of next year.
Key Objectives of the 2026 Budget Preparation:
The budget preparation is aligned with Royal directives to advance the comprehensive reform program, including political, economic, and administrative tracks, and the second phase of the Economic Modernization and Public Sector Reform Vision (2026-2029). The overarching aim is sustainable growth and improved quality of life for citizens.
The budget also seeks to:
Strengthen financial stability and reduce public debt to targeted levels.
Improve the business environment and attract investments.
Accelerate government digitalization.
Enhance the social protection network.
Continue implementing sound financial and economic policies despite regional challenges, which have led to higher GDP growth, maintained the kingdom’s credit rating, and contained the general budget deficit.
The directive establishes expenditure ceilings for ministries, departments, units, and governorates, with priorities including:
Implementing the second executive program of the Economic Modernization Vision and public sector reform roadmap.
Maintaining fiscal and economic stability and continuing structural reforms.
Supporting armed forces and security agencies.
Attracting domestic and foreign investments and enhancing public-private partnerships.
Improving capital expenditure efficiency and targeting growth-stimulating projects.
Developing healthcare, education, and social protection systems.
Enhancing tourism, industrial competitiveness, judicial capabilities, transport, water and energy sectors, and digital government services.
Addressing climate change commitments and promoting renewable energy and energy efficiency.
Economic Assumptions for 2026-2028:
Real GDP growth: 2.9% (2026), 3% (2027-2028).
Nominal GDP growth: 5.4% (2026-2028).
Inflation: 2.2% (2026-2028).
Exports growth: 4.3% (2026), 3.4% (2027), 6.3% (2028).
Imports growth: 7.5% (2026), 5.4% (2027), 5.2% (2028).
Current account deficit: -5.8% of GDP (2026), declining to -5.5% (2027) and -5.2% (2028).
Fiscal Assumptions:
The budget preparation also considers:
Allocations for the second executive program and public sector reform.
Annual salary and retirement increases.
Staffing for vacant and newly created positions.
Funding for armed forces and security agencies.
Servicing domestic and external debt at favorable interest rates.
Gradual reduction of public debt and primary deficit.
Rationalizing government expenditures without affecting performance.
Strategic allocations for essential commodities, healthcare, education, local governments, and new capital projects.
Integration of climate change priorities and gender-sensitive budgeting.
All ministries, departments, and governmental units are instructed to prepare detailed budgets for 2026-2028 according to the specified ceilings, including capital projects, and to submit them to the General Budget Department by November 9, 2025. They must also update their strategic plans, objectives, programs, and performance indicators, ensuring alignment with the Economic Modernization Vision and national priorities, while considering the needs of women, children, youth, and persons with disabilities.
The directive emphasizes linking budgets to performance, evaluating achievements, and maintaining efficiency and productivity in public spending. It also sets out detailed instructions on staffing, procurement, and reporting to ensure fiscal discipline and optimal resource utilization.
