Saudi Arabia announced Tuesday to provide a budget deficit of approximately 5.3% of the Gross Domestic Product (GDP) in 2025, more than 2.3% announced at the end of 2024, due to expenses greater than expected and the fall in oil revenues.
According to preliminary projections of the Ministry of Saudi Finance, the budget deficit must be maintained at a high level in 2026 to reach 165 billion rials (around $ 44 billion), or 3.3% of GDP.
The expenditure must amount to 1,313 billion rials (around $ 349 billion) and income to 1,147 billion rials.
The authorities plan to grow the real GDP of 4.4% in 2025, backed by the increase in “non -oil activities of 5%” and a growth of 4.6% in 2026.
Investments for economic diversification
The Gulf monarchy, the first economy of the Arab world, is involved in a vast program of reforms aimed at reducing its dependence on black gold, focusing on the development of tourism and business, particularly mega projects such as Neom, a futuristic megapol in the middle of the desert.
These projects represent a great cost for public finances, state income that has to decrease by 13.4% compared to 2024.
Aramco, the world’s main oil exporter and the pillar of the Saudi economy, has fallen to its profits for ten consecutive quarters from its record results at the end of 2022.
The Saudi flag saw its profits fall at the annual rate of 4.6% in the first quarter of the year, then 22% in the second quarter.
The Ministry of Finance also expects budget deficits of 2.3% of GDP in 2027 and 2.2% in 2028.
Source: BFM TV
