The state budget widened modestly to SAR 58.7 bn in 1Q 2025 from SAR 57.7 bn the previous quarter, according to the Finance Ministry’s quarterly budget performance report (pdf). Total government revenues came in at SAR 263.6 bn for the quarter, down 10% y-o-y, while expenditures rose 5% y-o-y to SAR 322.3 bn.

Non-oil revenue was up slightly, but lower oil demand and rising trade protectionism pushed down oil revenues, Saleh Sultan, former chief economist at FinMin, told Asharq Business.

REMEMBER- The budget deficit was earlier expected to come in at 2.3% of GDP (SAR 101 bn) in 2025. The recent drop in oil prices has led some analysts to pencil in a deficit of 6% of GDP — or more — for the year.

The Kingdom said last year it is willing to accept (modest) fiscal deficits as the price of pursuing long-term diversification goals, framing it as wanting to avoid “overheating” the national economy.

THE BREAKDOWN-

Oil revenues accounted for some 57% of total government income in the first quarter of the year, totaling SAR 149.8 bn (a drop of c. 18% y-o-y) Meanwhile, non-oil revenues made up the remaining 43%, coming in at a combined SAR 113.8 bn, up roughly 2% compared to the same period last year.

Total expenditures for 1Q rose approximately 5% y-o-y to SAR 322.3 bn. Compensation for government employees remained the largest spending category at SAR 146.1 bn, about 45% of total spending and up 6% y-o-y. Spending on goods and services followed at SAR 64.6 bn, accounting for 20% of the total and also up 6% y-o-y.

The debt situation: Total public debt came in at SAR 1.33 tn as at the end of the quarter, with domestic debt amounting to SAR 738.25 bn, while external debt reached SAR 477.67 bn. Debt issuances during the quarter totally SAR 114.86 bn, including SAR 54.04 bn in external debt.

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