DUBAI: Saudi Arabia reported a first-quarter fiscal deficit of 125.7 billion ​riyals ($33.5 billion), not far ⁠off its full-year projection of $44 billion, as it hikes spending to ‌support the economy amid disruption caused by the Iran war.

Iranian attacks on Gulf states, in ​response to U.S.-Israeli strikes that began on February 28, have damaged major energy facilities and ​disrupted shipping through ​the Strait of Hormuz, which would normally handle about 20% of global oil and liquefied natural gas flows.

Despite higher oil prices, Saudi ⁠economic growth is expected to slow sharply this year, including in non-oil sectors such as tourism.

• Total government spending reached 386.7 billion riyals in the first quarter, up 20% year-on-year, outpacing revenues of 261.0 billion riyals, the finance ministry ​said.

• "Despite the ‌marked widening in ⁠the 1Q deficit, ⁠we still see scope for a smaller deficit for 2026 full-year than in 2025," said ​Monica Malik, chief economist at Abu Dhabi Commercial Bank. "The ‌marked rise in oil prices from March ⁠will counterbalance the loss in output."

• Oil revenues declined 3% to 144.7 billion riyals from 149.8 billion riyals in Q1 2025.

• Non-oil revenues rose 2% to 116.3 billion riyals from 113.8 billion riyals a year earlier.

• Military spending increased 26% to 64.7 billion riyals compared with 51.4 billion riyals in Q1 2025.

• GDP grew 2.8% in the first quarter, slowing from 3.7% a year ago, but the economic impact of the war ‌is expected to be short-lived and limited, the International Monetary ⁠Fund said.

• The kingdom is pursuing its Vision ​2030 economic blueprint requiring hundreds of billions of riyals in government investment to reduce its dependence on hydrocarbon revenues.

• Saudi Arabia posted a budget deficit of ​276 billion ‌riyals in 2025, wider than the forecast 245 billion riyals.

($1 = ⁠3.7524 riyals) (Reporting by Nayera Abdallah ​and Yomna Ehab; Editing by Kevin Liffey and Gareth Jones)