Saudi Arabia’s budget deficit widened to SAR 94.8 bn in 4Q 2025, the highest level in over five years, according to the Finance Ministry’s quarterly budget performance report (pdf). The figure pushes the full-year deficit to SAR 276.6 bn — more than double the initially projected SAR 101 bn and 13% higher than the most recent official projections. This was driven by a 12% decline in annual revenues to SAR 1.11 tn, as oil receipts plunged.

In 4Q, the deficit was driven by a 9% y-o-y drop in revenues to SAR 276.7 bn. Expenditures ticked up 3% y-o-y to SAR 371.5 bn.

The breakdown

Oil revenue dropped 10% y-o-y to SAR 154.2 bn in 4Q 2025. Meanwhile, the diversification engine stalled, with non-oil revenue contracting 7% y-o-y to SAR 122.6 bn.

Total expenditure on non-financial assets (capex) saw a late-year rush, jumping 18% y-o-y to SAR 50.9 bn during the quarter. However, the cost of servicing the Kingdom’s debt accelerated sharply, with financing expenses jumping 27% y-o-y to SAR 14.9 bn.

On a full-year basis, oil receipts dropped 20% y-o-y to SAR 606.5 bn, while non-oil revenue growth slowed to 1% y-o-y, closing 2025 at SAR 505.2 bn. Full-year capex shrank 12% to SAR 168.5 bn — pointing to strict capital rationalization — while total annual financing expenses jumped 22% to SAR 54.4 bn.

A debt binge protects reserves: Government reserves were untouched to plug the gap, leaving them intact at SAR 399 bn by year’s end. The entire full-year shortfall was financed through borrowing, sending total public debt to SAR 1.51 tn.

The trend could continue this year: “If spending misses the budget by a similar amount in 2026, then the deficit is likely to be even higher than the 5.8% of GDP in 2025, driving debt up further,” Gulf analyst at GlobalSource Partners Justin Alexander tells EnterpriseAM.

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