Saudi Arabia Approves 2025 Budget: SR1.28 Trillion Spending

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Riyadh: Saudi Arabia has approved its state budget for the fiscal year 2025, projecting revenues of SR1.18 trillion ($315.73 billion) and expenditures of SR1.28 trillion, resulting in a deficit of SR101 billion. This budget reflects the government's strategic focus on economic diversification, with projected real GDP growth of 4.6 percent in 2025, up from the 0.8 percent estimate for 2024. The growth will be driven primarily by non-oil sector activities, as the Kingdom continues to strengthen its economy under the Vision 2030 reforms.

Sustainable Debt and Economic Expansion: The Finance Ministry has forecast the Kingdom's total debt to reach SR1.3 trillion in 2025, or 29.9 percent of GDP, a manageable level to support long-term financing needs. The government is pursuing expansionary policies to support economic diversification, aiming for a rise in revenues to SR1.3 trillion by 2027.nStrategic Allocation of Budget Resources: The 2025 budget focuses on maintaining essential services while accelerating investment in key sectors. The military sector will receive the largest allocation, with SR272 billion (5 percent increase from 2024), followed by SR260 billion for health and social development. The budget also prioritizes infrastructure and sustainable economic growth. Crown Prince's Commitment to Vision 2030: Crown Prince Mohammed bin Salman emphasized the government’s commitment to expanding the economic base and enhancing Saudi Arabia’s financial position. He highlighted the critical role of the Kingdom's sovereign wealth funds—the Public Investment Fund (PIF) and the National Development Fund—in driving economic stability and fulfilling Vision 2030 goals.

Private Sector Growth and Non-Oil Investment. The 2025 budget outlines strategic reforms to increase the private sector's contribution to GDP, attract foreign investments, and boost non-oil exports. The government also aims to reduce unemployment, enhance the business environment, and attract multinational companies to set up regional headquarters in Saudi Arabia. Fiscal Management and Borrowing Strategy: To finance the deficit, Saudi Arabia will leverage domestic and external markets, issuing bonds, sukuk, and alternative funding models. The Ministry of Finance will continue to ensure sustainable debt management through robust fiscal planning. The Kingdom's credit rating has recently been upgraded by Moody's, reflecting its progress in diversifying the economy beyond oil. Resilience Against Economic Challenges Despite global economic uncertainties, Crown Prince Mohammed bin Salman affirmed that Saudi Arabia is well-prepared to navigate challenges and remain a central player in global economic stability. The government's long-term financial planning and focus on Vision 2030 initiatives will help maintain growth momentum and foster economic prosperity.