Saudi Arabia freezes new consultancy contracts, hits KPMG projects

The timing is what makes the freeze especially sharp. Riyadh recorded a first-quarter 2026 budget deficit of 125.7 billion riyals, or $33.5 billion, the widest quarterly shortfall since 2018. Government spending rose about 20% from a year earlier even as revenues slipped slightly, and the ministry has projected a full-year deficit of 165.4 billion riyals. Oil export revenue still reached $24.7 billion in March, the highest in more than three years, which suggests the squeeze is not simply a response to collapsing income. Saudi Arabia is choosing to tighten discretionary spending, and consultancy fees are in the crosshairs.

For KPMG, McKinsey, Boston Consulting Group and PwC, the issue is less about one canceled growth market than about a shift in how the market functions. Saudi Arabia has spent years relying on outside advisers to design Vision 2030 programs, megaprojects and state restructuring, and contracts awarded since 2016 have reached about $196 billion. Now the government is signaling that it wants more work done internally and will scrutinize whether external advice produces a clear return. That creates a harder operating environment for consulting teams that have built staffing plans around a steady flow of Saudi work and partner growth assumptions around a market that had looked close to inexhaustible.