Saudi Arabia Projects SAR 1,285 Billion Spending in FY 2025 Budget

The Saudi Ministry of Finance announced on September 30, 2024, the Pre-Budget Statement for Fiscal Year 2025, estimating total expenditures at SAR 1,285 billion and total revenues at SAR 1,184 billion, resulting in a deficit of 2.3% of Gross Domestic Product (GDP). The statement outlines the government’s continued commitment to increasing strategic transformational spending to achieve economic diversification and sustainable growth, aligning with the Kingdom’s long-term fiscal planning methodology.

Context and Background

The Pre-Budget Statement, issued for the seventh consecutive year, reflects Saudi Arabia’s ongoing efforts to enhance transparency in public finance and improve fiscal disclosure. According to the Ministry of Finance, total revenues for FY 2025 are estimated at SAR 1,184 billion, projected to rise to SAR 1,289 billion by 2027. Total expenditures are estimated at SAR 1,285 billion, increasing to SAR 1,429 billion in 2027. The statement highlighted that the 2025 budget deficit of 2.3% of GDP comes amid the implementation of financial and economic initiatives and fiscal policies aimed at enhancing budget stability and sustainability.

Key Details and Ministerial Insights

Saudi Minister of Finance Mohammed Aljadaan emphasized the government’s focus on directed spending for essential services and strategic projects that enhance economic growth and sustainable development. He noted that the Saudi economy is expected to record positive growth rates during 2025 and over the medium term as a result of continued reforms, strategies, and projects under Saudi Vision 2030. The statement estimates real GDP growth of 4.6% in 2025, reflecting strong investor confidence and the Kingdom’s commitment to its ambitious strategies. Minister Aljadaan also highlighted the pivotal role of the Public Investment Fund (PIF) and the National Development Fund (NDF) in supporting economic stability.

Implications and International Impact

The Pre-Budget Statement underscores Saudi Arabia’s resilience amid global economic slowdown and geopolitical tensions. Minister Aljadaan explained that the Kingdom has demonstrated a strong fiscal position and economic flexibility, with safe levels of government reserves and acceptable public debt levels. The government plans to continue borrowing according to the approved annual plan to finance the expected deficit and repay debt principal due in FY 2025. The statement also noted that non-oil activities, particularly in tourism, entertainment, transportation, logistics, and industry, have contributed to GDP growth, reduced unemployment to historic lows, and improved quality of life.

Vision 2030 Alignment

The fiscal roadmap outlined in the Pre-Budget Statement directly supports Saudi Vision 2030’s objectives of economic diversification, private sector empowerment, and sustainable growth. By maintaining strategic transformational spending and adopting long-term fiscal planning, Saudi Arabia continues to position itself as a leading global economy. The government’s commitment to fiscal transparency and discipline, combined with the ambitious projects of Vision 2030, reinforces the Kingdom’s role as a stable and attractive destination for international investment, ensuring a prosperous future for its citizens and residents alike.

20 Questions

Q1. What is the estimated total expenditure for Saudi Arabia in FY 2025?

A1. The Saudi Ministry of Finance estimates total expenditures for FY 2025 at SAR 1,285 billion, as announced in the Pre-Budget Statement released on September 30, 2024.

Q2. What is the estimated total revenue for Saudi Arabia in FY 2025?

A2. Total revenues for FY 2025 are estimated at SAR 1,184 billion, according to the official Pre-Budget Statement from the Ministry of Finance.

Q3. What is the projected deficit for FY 2025 as a percentage of GDP?

A3. The budget deficit for FY 2025 is expected to be approximately 2.3% of Gross Domestic Product (GDP), as stated in the Pre-Budget Statement.

Q4. When was the Pre-Budget Statement for FY 2025 announced?

A4. The Saudi Ministry of Finance announced the Pre-Budget Statement for Fiscal Year 2025 on September 30, 2024.

Q5. How does the Pre-Budget Statement support Saudi Vision 2030?

A5. The statement commits to increasing strategic transformational spending to achieve economic diversification and sustainable growth, directly aligning with Vision 2030 goals.

Q6. What is the expected real GDP growth rate for Saudi Arabia in 2025?

A6. The Pre-Budget Statement estimates real GDP growth of 4.6% for 2025, reflecting the Kingdom’s commitment to implementing its ambitious strategies.

Q7. Who is the Saudi Minister of Finance?

A7. The Saudi Minister of Finance is Mohammed Aljadaan, who provided key insights and comments in the Pre-Budget Statement announcement.

Q8. What role does the Public Investment Fund (PIF) play in economic stability?

A8. Minister Aljadaan highlighted the pivotal role of the Public Investment Fund (PIF) in supporting economic stability, alongside the National Development Fund (NDF).

Q9. What is the estimated inflation rate for Saudi Arabia by the end of 2024?

A9. The consumer price index (inflation rate) is expected to reach approximately 1.7% by the end of 2024, according to the statement’s initial expectations.

Q10. How does the government plan to finance the budget deficit in FY 2025?

A10. The government will continue borrowing according to the approved annual borrowing plan to finance the expected deficit and repay debt principal due in FY 2025.

Q11. Which sectors contributed to non-oil GDP growth in 2024?

A11. The statement noted that non-oil activities, including tourism, entertainment, transportation, logistics, and industry, contributed to GDP growth in 2024.

Q12. What is the significance of issuing the Pre-Budget Statement for the seventh consecutive year?

A12. It reflects the Kingdom’s ongoing efforts to enhance transparency in public finance and improve fiscal disclosure, demonstrating commitment to good governance.

Q13. What are the estimated total revenues projected for 2027?

A13. According to the statement, total revenues for FY 2027 are estimated to reach approximately SAR 1,289 billion.

Q14. What are the estimated total expenditures projected for 2027?

A14. Total expenditures for FY 2027 are estimated at approximately SAR 1,429 billion, as per the Pre-Budget Statement.

Q15. How does the government ensure debt sustainability?

A15. The government will increase the public debt portfolio in a deliberate manner to ensure debt sustainability, supporting the acceleration of Vision 2030 programs.

Q16. What is the expected real GDP growth rate for 2024?

A16. The statement expects real GDP growth of 0.8% in 2024, supported by non-oil activities growing at an estimated 3.7%.

Q17. How has Saudi Arabia’s economy demonstrated resilience amid global challenges?

A17. Saudi Arabia has shown strength through safe levels of government reserves, acceptable public debt, and a flexible spending policy that helps deal with future crises.

Q18. What is the purpose of the Pre-Budget Statement?

A18. The Pre-Budget Statement aims to provide transparency in public finance, enhance fiscal disclosure, and reflect the government’s reform efforts, issued for the seventh consecutive year.

Q19. What is the role of the National Development Fund (NDF) in economic stability?

A19. Minister Aljadaan noted the pivotal role of the National Development Fund (NDF) and its development funds in supporting economic stability, alongside the PIF.

Q20. Where can the full Pre-Budget Statement be accessed?

A20. The full Pre-Budget Statement for Fiscal Year 2025 is available on the Ministry of Finance website at www.mof.gov.sa, as announced in the official release.

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