Preliminary Budget Statement: Saudi Arabia expected to record a deficit for the next 4 years

The Ministry of Finance revealed that the estimated revenues for the Saudi budget for the next year 2025 will amount to 1,184 billion riyals, while the expected expenditures will be 1,285 billion riyals, according to the preliminary statement of the Saudi budget. It is clear from the announced figures that the budget in 2025 will record a deficit of 101 billion riyals, and thus it is considered the third budget deficit for the third year in a row, as the Ministry of Finance estimates indicate a deficit of 79 billion riyals by the end of the current year 2024. It is likely that Saudi Arabia’s budget revenues will reach about 1,172 billion riyals by the end of the year, while expenditures are expected to reach 1,251 billion riyals, with the deficit being 79 billion riyals. It is noteworthy that the Saudi budget revenues during the first half of the current year 2024 amounted to 647 billion riyals, and expenditures amounted to 674.8 billion riyals, and the first six months of the current year recorded a deficit of 27.7 billion riyals, and therefore it is expected that there will be greater spending than the first half and less revenues than the first half, which will have an impact on the size of the deficit, which is expected to reach 79 billion riyals for the entire current year 2024. According to the statement of the Ministry of Finance, the revenues of the Saudi budget for the year after next 2026 are expected to reach about 1198 billion riyals, and expenditures 1328 billion riyals, which exceed the size of the revenues and expenditures of next year 2025, expecting the deficit to reach 130 billion riyals in 2026, while expectations for the year 2027 came that revenues will reach 1289 billion riyals, and expenditures 1429 billion riyals, and the deficit will reach 140 billion riyals. The 2027 expenditure and revenue figures are the largest (estimated budget) in the history of the Kingdom ever.

According to the statement, the government of the Kingdom of Saudi Arabia aims to continue supporting economic growth and continuing to raise the level of services provided to citizens and residents in various sectors by increasing transformational spending while maintaining financial sustainability, as the Saudi economy is expected to continue recording positive growth rates in 2024 and in the medium term thanks to structural reforms and strategies emanating from Saudi Vision 2030, which contributed to diversifying the economic base and exploiting potential economic growth opportunities, providing an attractive investment environment, as well as enhancing the role of the private sector, in addition to supporting the growth of promising sectors.

These reforms were clearly reflected in the expectations of international organizations for the positive performance of the Saudi economy despite the slowdown in growth witnessed by the global economy, which is expected to continue for the current and next year as a result of tightening monetary policies to limit high inflation rates, amid continuing geopolitical fluctuations.