Minister of Finance approves annual borrowing plan for fiscal year 2025

Mohammed bin Abdullah Al-Jadaan, Minister of Finance, approved the annual borrowing plan for fiscal year 2025, after it was approved by the Board of Directors of the National Debt Management Center.

The plan included the most prominent developments in public debt for the year 2024, local debt market initiatives, in addition to the financing plan for the year 2025 and its guiding principles, with a review of the calendar of the Kingdom’s local Sukuk program issuances in Saudi riyals for the year 2025.

According to the plan, the expected financing needs for the year 2025 will amount to approximately 139 billion riyals; to cover the expected deficit in the state’s general budget for the year 2025, which is estimated at approximately 101 billion riyals, according to the Ministry of Finance’s statement on the state’s general budget for the fiscal year 2025, and to pay the principal debt dues during the current year 2025, amounting to the equivalent of 38 billion Saudi riyals.

To enhance the sustainability of the Kingdom’s access to various debt markets and expand the investor base, the Kingdom aims during 2025 to continue diversifying local and international financing channels to cover financing needs with the required efficiency, by issuing sovereign debt instruments at a fair price within studied frameworks and foundations for risk management, in addition to taking advantage of market opportunities to expand the implementation of special financing operations that contribute to enhancing economic growth, such as financing through export credit agencies, financing infrastructure development projects, financing capital expenditures, and studying available opportunities to enter new markets and currencies. According to the Ministry, the Center will continue to diversify financing channels throughout 2025 to ensure the Kingdom’s sustainable access to various debt markets by issuing sovereign debt instruments at fair prices while maintaining studied risk levels. Expanding financing through export credit agencies, financing infrastructure projects, and studying available opportunities in the markets to enter new currencies based on market conditions. The Center will also work with relevant parties to ensure that the local debt market is deep enough to accommodate the volumes of issuances and stabilize liquidity conditions in the local market. Through the implementation of early repurchase operations, the Center continues to issue debt instruments in an optimal manner to maintain the average life of the Kingdom’s public debt portfolio and reduce refinancing risks.

By the end of 2024, the distribution of debt returns between fixed- and variable-income debt reached 88% as fixed-income debt and 12% as variable-income debt of the total debt portfolio. This balanced approach helps reduce the impact of interest rate fluctuations on debt service costs in the Kingdom.

The current international debt portfolio also contains limited risks related to foreign exchange rate variables. The debt denominated in euros amounts to approximately 1% of the total debt portfolio by the end of 2024.