Saudi Arabia’s sizable deficit is a risk worth taking

Saudi Arabia's first-quarter budget deficit, the largest since late 2018, reflects both the impact of the Iran conflict and deliberate policy choices to accelerate investments in alternative trade routes. The government increased capital spending by 56% and defense outlays by 26% to support the non-oil economy amid war-driven uncertainty, while still potentially achieving a lower full-year deficit than the previous year's 5.8% of GDP.