Saudi budget 2025: The government reveals the method of paying the budget deficit

Saudi Arabia’s 2025 budget revealed expectations that the public debt balance in 2025 will reach about 1,300 billion riyals (equivalent to 29.9% of the gross domestic product), with the aim of covering the expected budget deficit and paying the principal of the debt due during 2025 and in the medium term, and seizing the available opportunities according to market conditions to implement additional financing operations proactively to manage the principal debt dues for the coming period, in addition to exploiting market opportunities to implement alternative government financing operations that would enhance economic growth such as financing capital projects and infrastructure, with the aim of diversifying financing channels to maintain the efficiency of markets and enhance their depth.

According to the budget statement, to meet the Kingdom’s financing needs, the Ministry of Finance, through the National Debt Management Center, is preparing an annual borrowing plan in accordance with the medium-term debt strategy, which aims to maintain debt sustainability, diversify financing sources between local and foreign, and access global debt markets to enhance the Kingdom’s position in international markets, within well-studied frameworks and foundations for risk management. This strategy takes into account the objectives of Saudi Vision 2030 in enhancing the growth of the financial sector and deepening the local debt market sufficiently to accommodate debt issuances and stabilize liquidity conditions. The strategy aims to diversify financing tools between issuing bonds, sukuk and loans, and to continue searching for new markets and financing methodologies through alternative government financing through project financing, infrastructure financing and the Export Credit Agency. This comes within the Ministry’s strategy to support the continuity and completion of major development projects in the Kingdom. The Saudi Ministry of Finance announced the estimated budget for the year 2025, which showed that revenues are 1,184 billion, expenditures are 1,285 billion and the deficit is 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.