Saudi Arabia has paused new consultancy contract approvals and delayed some payments to international advisory firms following the Iran conflict, as the kingdom reassesses spending priorities under Saudi Vision 2030. Executives familiar with the matter said the restrictions emerged after the US-Israeli war against Iran disrupted regional markets and increased pressure on Saudi fiscal planning in May 2026.
Saudi Arabia Tightens Consultancy Spending Controls
Senior executives at global consulting firms told the Financial Times that Saudi ministries and state entities have stopped issuing fresh consultancy awards unless projects receive direct approval from the Ministry of Finance. The restrictions affect western advisory firms that expanded aggressively in the kingdom during the rollout of Saudi Vision 2030.
Consultancies including McKinsey & Company, Boston Consulting Group, and the Big Four accounting networks have built large Gulf operations over the past decade. Saudi Arabia became one of the sector’s largest regional markets as Crown Prince Mohammed bin Salman accelerated investments in tourism, infrastructure, artificial intelligence, and giga-project developments.
Executives said ministries were also instructed to delay invoice payments until at least July 2026 unless projects received exceptional clearance. Some consultants described the move as a temporary financial control measure rather than a cancellation of ongoing work.
Vision 2030 Projects Face Fresh Budget Pressure
Saudi Arabia has already slowed or revised several large-scale developments during the past two years as the kingdom worked to manage widening deficits and rising capital expenditure. Core elements of NEOM, including plans linked to the 170-kilometre linear city known as THE LINE, have faced scaling adjustments amid changing economic priorities.
The latest measures follow rising geopolitical risks linked to the Iran conflict. Regional executives said Saudi Arabia now faces additional defence and infrastructure costs, especially around Red Sea logistics and energy security. Concerns over potential disruptions in the Strait of Hormuz have also increased pressure on long-term fiscal planning.
Saudi Arabia continues to prepare for major global events, including Expo 2030 and the 2034 FIFA World Cup. Those commitments require sustained investment across transport, hospitality, urban development, and digital infrastructure.
Saudi Fiscal Deficit Reaches Highest First-Quarter Level Since 2018
The Saudi Ministry of Finance disputed claims that payments were broadly delayed. The ministry stated that 99.5 per cent of invoices in 2026 had been paid within contractual deadlines. Officials also said consultancy spending continues to undergo review to ensure projects align with Saudi Vision 2030 objectives.
Government data released in the ministry’s quarterly budget report showed Saudi Arabia’s fiscal deficit widened to SR125.7 billion ($33.5 billion) during the first quarter of 2026. The figure marks the kingdom’s largest quarterly deficit since 2018. Defence spending also rose 26 per cent during the same period.
Oil revenues exceeded official projections in the first quarter, according to the ministry. However, authorities attributed the larger deficit partly to wartime expenditure and timing gaps in government cash flow management linked to the regional conflict.
What the Consultancy Pause Means for Saudi Arabia’s Economy
The latest restrictions reflect a broader recalibration of Saudi spending rather than a full reversal of Vision 2030 investment plans. Riyadh has increasingly prioritised projects tied directly to economic diversification, logistics, tourism, and international event delivery while reducing spending on less urgent initiatives.
Consultancy executives said the current pause resembles a similar slowdown in 2024, when ministries temporarily froze project approvals and delayed contractor payments. Several industry executives expect consultancy activity to resume after the second quarter once ministries complete updated budget reviews tied to defence and infrastructure priorities.
