Saudi Arabia Projects $315.6 Billion Revenues, $342.53 Billion Expenditure For 2025 Budget
On Monday, the Saudi Ministry of Finance unveiled its Pre-Budget Statement for the fiscal year 2025, outlining a budget that forecasts expenditures of SR 1,285 billion ($342.53bn) against revenues of SR 1,184 billion ($315.6bn).
This projection leads to an anticipated deficit of SR 101 billion, equating to 2.3 percent of the nation's Gross Domestic Product (GDP). This announcement is part of a broader strategy aimed at fostering economic diversification and sustainable growth through increased strategic transformational spending.
Minister of Finance Mohammed Al-Jadaan highlighted the government's dedication to focusing expenditures on crucial services for both citizens and residents, alongside strategic projects that bolster economic expansion and sustainable development.
Al-Jadaan underscored the positive growth rates expected for the Saudi economy in 2025 and beyond, largely attributable to the ongoing reforms, strategies, and initiatives under Saudi Vision 2030. These efforts are expected to diversify the economic base, amplify the role of the private sector, and expand promising sectors, thus creating more business opportunities and jobs
The statement further elaborated on the Saudi government's commitment to long-term fiscal planning, emphasizing sustainable growth and economic gains as primary objectives. Al-Jadaan pointed to the flexibility of public finance to counter medium- to long-term challenges, also highlighting the crucial roles of the Public Investment Fund (PIF) and the National Development Fund (NDF) in bolstering economic stability. He emphasized the positive outlook for the Saudi economy in 2025, projecting a real GDP growth of 4.6%, as a testament to the Kingdom's ambitious strategies and sustainable development goals.
Reflecting on the broader economic landscape, Al-Jadaan mentioned that despite a global economic slowdown and challenges, Saudi Arabia maintains a robust fiscal position and a resilient economy. He noted the country's safe government reserve levels, manageable public debt, and a flexible spending policy. This approach, Al-Jadaan explained, positions Saudi Arabia well to navigate future crises.
Strategic Economic Efforts
The ministry's statement also highlighted the pivotal role of non-oil activities in driving GDP growth, thereby enriching promising sectors like tourism, entertainment, transportation, logistics, and industry. This growth has not only improved living standards but also empowered the private sector and significantly reduced unemployment rates to historic lows. Such economic advancements have garnered positive outlooks from international organizations and credit rating agencies on the Saudi economy's performance.
Looking ahead to 2024, the statement provided insights into economic expectations, including a real GDP growth of 0.8 percent, primarily supported by a 3.7 percent increase in non-oil activities. Additionally, recent interest rate reductions are anticipated to boost demand, further stimulating economic growth. Projections also suggest that the consumer price index, or inflation rate, will hover around 1.7 percent by the end of 2024.
Financing and Debt Management Strategies
Al-Jadaan revealed plans for the government to continue borrowing as per the approved annual borrowing plan to finance the expected budget deficit and to repay debt principal due in 2025. The government will also explore market opportunities for financing activities, including alternative government financing. This strategy aims to deliberately increase the volume of the public debt portfolio, ensuring debt sustainability while expanding spending to hasten the implementation of programs and projects aligned with Saudi Vision 2030 objectives.
The issuance of the Pre-Budget Statement for the seventh consecutive year underscores Saudi Arabia's commitment to enhancing fiscal transparency and disclosure. It reflects ongoing government efforts to strengthen fiscal stability in the face of global economic challenges, continuing the implementation of reforms that have bolstered the Kingdom's fiscal position.
Saudi Arabia's Pre-Budget Statement for fiscal year 2025 sets a clear trajectory towards economic diversification, growth, and sustainability. Through strategic investments, fiscal planning, and the continued implementation of Saudi Vision 2030 initiatives, the Kingdom aims to secure its economic future, demonstrating resilience and adaptability amid global uncertainties.
Sign in with Google