Overview:

Saudi Arabia's second-quarter 2026 budget results reflect strengthened fiscal performance, with total revenues reaching 338.7 billion riyals (90.3 billion dollars) and a significant 73 percent reduction in the budget deficit. Non-oil revenues climbed 32 percent quarter-over-quarter, underscoring economic diversification gains. Meanwhile, global financial markets displayed mixed signals as U.S. equity indices closed higher, eurozone inflation rose to 2.9 percent in July, and precious metals and crude oil experienced volatile trading patterns amid geopolitical tensions and supply dynamics.

Details:

Saudi Arabia's Ministry of Finance disclosed that second-quarter revenues totaled 338.784 billion riyals against expenditures of 373 billion riyals, representing a quarterly budget deficit of 34.2 billion riyals. The 73 percent year-over-year decline in the overall budget deficit demonstrates improved fiscal discipline despite production pressures in the hydrocarbon sector. Non-oil revenues climbed to 154 million riyals (41.1 billion dollars), reflecting robust activity across diverse economic sectors. Notably, Q2 2026 revenues marked the highest quarterly intake in the past 24 months, signaling sustained momentum in both traditional and emerging revenue streams.

Internationally, crude oil prices retreated but remained positioned for approximately 20 percent monthly gains, driven by increased supply flows through critical maritime passages despite stalled U.S.-Iran diplomatic negotiations. Brent crude declined toward 88 dollars per barrel. Gold prices surged above 4,100 dollars per ounce, recording their first monthly gains in five months as investors reacted to declining dollar strength and inflation expectations. The Bank of Japan held interest rates unchanged but reaffirmed readiness to increase borrowing costs to combat rising inflation risks. Eurozone inflation accelerated to 2.9 percent in July. U.S. equity indices, including the S&P 500, closed with gains. Asian markets followed, with the Korean KOSPI index rising more than 13 percent and Japan's Nikkei 225 advancing for a second consecutive session.

Saudi-listed companies reported mixed earnings: the National Healthcare Company (Riyada) posted 17.6 percent profit growth to 94 million riyals, Astra Industrial increased earnings 9.8 percent to 192 million riyals, and Al-Azizia Panda posted a net loss of 58 million riyals in the quarter. The Saudi insurance sector expanded with total premiums reaching 84.3 billion riyals in 2025, up 10.7 percent.

Outlook:

Investors are monitoring the trajectory of U.S. Federal Reserve signals regarding interest rate policy and their ripple effects on commodity valuations and emerging market sentiment. Central bank purchasing activity and geopolitical developments remain critical variables shaping gold and oil price directions through year-end.