Saudi 2025 budget sees lower deficit on spending trims

Introduction

Saudi Arabia’s 2025 budget projection shows a reduction in the deficit compared to the previous year, primarily due to spending adjustments and revenue expectations. Here are the key points regarding the 2025 budget:

Deficit Reduction

The expected deficit for 2025 is projected to be $26.8 billion, which represents 2.3% of Saudi Arabia’s GDP. This is a decrease from the 2024 deficit of $30.6 billion, or 2.8% of GDP. The reduction in deficit indicates the government’s efforts to balance its finances while maintaining strategic investments.

Budget Figures

Total Expenditures: Estimated at SR1.29 trillion (approximately $343.7 billion)

Total Revenues: Projected to reach SR1.19 trillion (about $317.3 billion)

Resulting Deficit: SR101 billion (around $26.9 billion)

Strategic Focus

The Saudi government emphasizes its commitment to:

Increasing strategic transformational spending aligned with Vision 2030

Boosting expenditure on essential services and projects aimed at fostering economic growth

Maintaining fiscal flexibility to address medium and long-term challenges

Economic Outlook

GDP Growth: Real GDP growth is forecasted at 4.6% for 2025

Non-Oil Sector Growth: Significant contributions from tourism, entertainment, transportation, logistics, and industry sectors are expected

Inflation: Projected to reach 1.7% by the end of 2024

Fiscal Strategy

The government plans to continue borrowing to finance the projected deficit and repay maturing debt. While public debt is expected to increase, it will be managed to ensure sustainability while supporting Vision 2030 initiatives.

Conclusion

This budget projection reflects Saudi Arabia’s ongoing efforts to diversify its economy, reduce dependence on oil revenues, and maintain fiscal discipline while investing in strategic sectors for long-term growth.