Saudi Arabia seeks $8bn loan as war-driven deficit widens

September 1, 2026 at 08:59 AM2 min

This digest was compiled by AI from multiple sources — links to the originals are below.

Saudi Arabia is in preliminary talks with banks for a loan of at least $8 billion, Bloomberg reports. The move follows a second-quarter budget deficit of 34.3 billion riyals ($9.1 billion) and a roughly 25% contraction in the oil sector. The kingdom is seeking new financing even as it has already raised about $6 billion from bonds this year.

Key Facts

Saudi Arabia's National Debt Management Center has begun consultations with banks on a loan of at least $8 billion.
The kingdom's budget deficit reached 34.3 billion riyals ($9.1 billion) in the second quarter.
Saudi Arabia's oil sector contracted by about 25% in the second quarter, the sharpest decline since the COVID-19 pandemic.
Saudi Arabia has raised about $6 billion from domestic and international bonds since the start of the year.
Saudi Aramco is holding separate talks on possible financing, while the sovereign wealth fund raised $7 billion in May.

Loan Negotiations

Saudi Arabia is considering a new loan of at least $8 billion, with talks at a preliminary stage and no guarantee of a deal. The National Debt Management Center (NDMC) has started consultations with banks, according to Bloomberg sources. Saudi Aramco is separately negotiating possible financing. The new borrowing may be part of Riyadh's strategy to diversify funding sources.

Economic Pressure

The kingdom's economy contracted at its sharpest rate since the COVID-19 pandemic in the second quarter. The oil sector shrank by about 25% despite rising global oil prices driven by war risks. The budget deficit reached 34.3 billion riyals, or about $9.1 billion, in the second quarter. Rising oil prices did not fully offset losses and increased spending linked to the worsening external economic situation.

Debt Market Activity

Saudi Arabia has raised about $6 billion from domestic and international bonds since the start of the year. Saudi Aramco placed additional debt instruments of about $4 billion, and the sovereign wealth fund raised $7 billion in May. In late 2025, NDMC signed a $13 billion seven-year syndicated loan. The deal signaled Riyadh's readiness to use bank financing more actively for Crown Prince Mohammed bin Salman's economic transformation plan.