Saudi Arabia forecasts 2025 fiscal deficit of $27bn

SPA

• Approval of 2025 state budget
• Deficit represents 2.3% of GDP
• GDP growth of 4.6% forecast

Saudi Arabia has approved its 2025 state budget, which estimates total revenues at SAR1.18 trillion ($314 billion) and expenditures at SAR1.28 trillion – resulting in a fiscal deficit of SAR101 billion ($26.9 billion).

The finance ministry said this would represent 2.3 percent of gross domestic product, which is lower than the 3 percent of GDP in a recently revised estimate for 2024. 

Mohammed Al Jadaan, the country’s finance minister, said the government aims to expand strategic spending through 2025 on development and giga-projects, in line with Vision 2030 programmes, according to the state-run Saudi Press Agency. 

Public debt is expected to rise to SAR1.3 trillion (30 percent of GDP) by the end of 2025 from SAR1.2 trillion in 2024.

That figure is in line with global averages but is rising as the government looks for ways to fund Vision 2030 projects. 

Net foreign investment inflows totalled SAR21.2 billion in the first half of 2024. FDI is lagging behind the target of $100 billion a year by 2030. 

The government said in October 2023 that it expected three years of budget deficits because oil prices were lower than expected – despite Opec+ output cuts. That policy, due to end this year, led the Saudi economy to contract by 0.8 percent in 2023. 

The deficit is part of the overall fiscal planning for the budget, as the government aims to continue domestic and international fiscal operations to bridge the 2025 shortfall and repay debt due in 2025 and over the medium term, Al Jadaan said. 

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The finance ministry said in October the fiscal deficit would reach SAR118 billion in 2024, 49 percent higher than the forecast in last December’s budget statement. 

The 2025 budget calculations exclude any additional dividend distributions by Saudi Aramco, the minister said, underscoring the government’s focus on diversification and fiscal sustainability.

Crown Prince Mohammed bin Salman said an annual borrowing plan would be prepared with a medium-term debt strategy to diversify local and foreign financing sources and access global debt markets.

He pointed out that Saudi Arabia is projected to achieve the second-fastest GDP growth rate among major economies next year, estimated at 4.6 percent, citing the International Monetary Fund’s latest forecast. He praised the rise in non-oil GDP, which stands at 52 percent in 2024.