Saudi Budget 2025: For the first time, public debt approaches 1.2 trillion riyals, will reach this level in 2025

Saudi Arabia’s 2024 budget revealed expectations that the Kingdom’s public debt will reach 1,199 billion riyals for the first time in the Kingdom’s history, equivalent to 29.3% of the gross domestic product, compared to 1,024 billion riyals, equivalent to 24.8% of the GDP in the previous year 2023.

According to the budget statement, in order to meet financing needs, and in accordance with the approved annual borrowing plan, it is expected to continue local and foreign borrowing operations to finance the expected budget deficit and repay the principal of the debt due during the year 2024 AD and in the medium term, and to take advantage of available opportunities according to market conditions to implement additional proactive financing operations to repay the principal of the debt for the coming years, and to take advantage of market opportunities to implement alternative government financing operations with the aim of financing transformational spending for capital projects and infrastructure, and thus the total balance of public debt is expected to reach about 1,199 billion riyals in 2024 (equivalent to 29.3% of GDP).

The 2025 budget aims to continue to maintain the Kingdom’s financial position and achieve financial sustainability by maintaining sustainable levels of public debt and significant levels of government reserves to enhance the Kingdom’s ability to deal with external shocks, as it is expected that the balance of government reserves at the Saudi Central Bank (SAMA) will continue to be maintained at the same level as in 2024 by the end of 2025, amounting to approximately 390 billion riyals.

In light of global and local developments and to deal with various economic challenges and uncertainty resulting from geopolitical tensions and fluctuations in oil markets, three scenarios were prepared for the state’s general revenues for 2025, which included the basic scenario – which is adopted in the budget – in addition to scenarios that take into account achieving revenues at levels higher and lower than the basic scenario.

The Saudi Ministry of Finance announced the estimated budget for the year 2025, which showed that revenues amounted to 1,184 billion, expenditures amounted to 1,285 billion, and the deficit amounted to 101 billion riyals.

In contrast, actual revenues for the year 2024 amounted to 1,230 billion riyals, expenditures amounted to 1,345 billion riyals, and the deficit amounted to 115 billion riyals.