Crown Prince Mohammed bin Salman links Saudi 2025 budget deficit to expansionary plans for 4.6% GDP growth

Saudi Arabia has approved its fiscal year 2025 budget, forecasting a deficit of SR101 billion ($27 billion) as the Kingdom ramps up expansionary spending to drive economic diversification and sustainable growth. Crown Prince Mohammed bin Salman chaired the weekly Cabinet session on Tuesday, underscoring the government’s commitment to enhancing the nation’s financial resilience while achieving the ambitious goals of Vision 2030.

Projected revenues for 2025 are set at SR1.18 trillion ($315.73 billion), while expenditures are expected to reach SR1.28 trillion ($342.73 billion). Despite the anticipated deficit, the budget prioritises strategic investments in key sectors, bolstering the non-oil economy, which is forecasted to contribute significantly to the 4.6% Real GDP growth in 2025—an impressive leap from the modest 0.8% estimated growth for 2024.

The approved budget reflects Saudi Arabia’s ongoing efforts to balance fiscal prudence with economic expansion. The Finance Ministry’s figures align closely with its pre-budget statement issued in September, which anticipated a 4% decline in both revenues and expenditures and a 12% reduction in the deficit compared to 2024. This measured approach underscores the Kingdom’s focus on maintaining fiscal stability while pursuing transformative economic reforms.

Sustained Expansionary Policies

The budget for 2025 is built on a baseline scenario that carefully considers potential fluctuations in global economic conditions and petroleum markets. The ministry projects similar deficit levels over the medium term, with SR130 billion forecasted for 2026 and SR140 billion for 2027. This outlook reflects the government’s ongoing strategic spending designed to fuel economic diversification, a cornerstone of Vision 2030.

Saudi Arabia’s total debt is projected to rise to SR1.3 trillion in 2025, representing 29.9% of GDP—an increase deemed sustainable to meet the nation’s financing needs. By 2027, revenues are expected to climb to around SR1.3 trillion, as the Kingdom’s economic diversification efforts begin to yield results.

The fiscal strategy also includes a careful balance between increasing expenditures and preserving fiscal stability. Key priorities include maintaining essential services for citizens and residents while accelerating investment in infrastructure, healthcare, education, and renewable energy projects.

Commitment to Vision 2030

In a statement following the Cabinet session, Crown Prince Mohammed bin Salman reiterated the government’s unwavering focus on economic diversification and long-term financial sustainability. “We will continue to work on expanding the economic base and enhancing the Kingdom’s financial position,” he said.

Central to this mission are Saudi Arabia’s sovereign wealth funds, the Public Investment Fund (PIF) and the National Development Fund (NDF), which play pivotal roles in achieving Vision 2030 objectives. “These funds are essential to diversifying the economy and supporting long-term investments,” the Crown Prince emphasised.

Under Vision 2030, the Kingdom has embarked on bold reforms and robust investment initiatives aimed at reducing its dependence on oil revenues. This includes a focus on sectors such as tourism, technology, renewable energy, and logistics, which are critical to creating a more resilient and dynamic economy.

Fiscal Sustainability and Resilience

The 2025 budget also highlights the importance of managing government reserves and maintaining sustainable public debt levels. Revised projections for the 2024 budget indicate a deficit of SR115 billion, with total debt reaching SR1.2 trillion, or 29.3% of GDP. These figures reflect the Kingdom’s careful management of its fiscal position, ensuring resilience against unforeseen economic shocks.

Saudi Arabia’s approach to fiscal policy aims to strike a balance between supporting growth and ensuring long-term sustainability. The budget’s focus on strategic investments, coupled with prudent debt management, positions the Kingdom to navigate global economic uncertainties while advancing its ambitious development goals.

Driving Future Growth

Saudi Arabia’s economy is at a pivotal juncture, driven by strategic reforms that are reshaping its economic landscape. The government’s focus on non-oil sector growth, coupled with its commitment to fiscal sustainability, signals a confident and forward-thinking approach.

As the global economy faces ongoing challenges, Saudi Arabia’s proactive measures to diversify its economic base and strengthen its financial position underscore its determination to achieve the Vision 2030 blueprint. With the approval of the 2025 budget, the Kingdom is poised to drive sustained growth, foster innovation, and secure a prosperous future for its citizens.