Budget deficit hits SAR 277 bn in 2025

The 2025 actual budget deficit exceeds projections: Saudi Arabia’s full-year budget deficit ballooned to SAR 277 bn (5.8% of GDP) in FY 2025, more than double the initially projected SAR 101 bn (2.3% of GDP), according to the Finance Ministry’s year-end budget performance report (pdf).

Expenditure surges, revenues drop: The widening fiscal gap was driven by an 8% surge in total expenditures to SAR 1.39 tn from initial budget projections, while total revenues fell 6.1% short of budget projections as well to land at SAR 1.11 tn.

The breakdown

Oil slide pulls down revenues: Total actual revenues fell due to a 10.1% decline in the other revenues category — which includes oil receipts — as Brent crude averages fell to USD 69.1 / bbl last year, compared to USD 80.5 in FY 2024.

Non-oil picks up on taxes: Non-oil revenues provided a partial cushion, rising 5.3% above budget estimates to SAR 505 bn.Tax revenues grew 2.5% to SAR 389 bn, supported by a 11.3% beat in income and corporate taxes (SAR 34 bn) and a 1.4% increase in taxes on goods and services (SAR 294 bn). Custom duties also ticked up 6.8% to SAR 24 bn on higher merchandise imports.

Opex surges on priorities: Operational expenditures overshot the budget by 10.8%, hitting SAR 1.22 tn. This overrun was driven by a 19.2% jump in goods and services spending to SAR 316 bn — funneled into state industrial, water, and tourism events — and a 56.3% spike in the other expenses category to SAR 134 bn to clear commitments under digital, AI, and green energy initiatives.

Capex slides on gigaprojects completion: Capital expenditure on non-financial assets dropped 8.3% below budget projections to SAR 169 bn. The drop is attributed to the completion of key infrastructure, transport, and giga-projects of major milestones and transitioning into operational phases. This includes projects such as the Riyadh public transport project, the completion of a large part of the Grand Mosque expansion, the rolling out of the first phase of Qiddiya, parts of the Red Sea Project, and the completion of the Red Sea International Airport.

The Kingdom took on heavy debts to plug the gap, leaving reserves untouched. Total funding activities hit SAR 402 bn — 69% raised domestically and 31% internationally — which covered the deficit, repaid SAR 38 bn in principal due, and funded SAR 60.4 bn in early debt buybacks. This left government reserves at Sama untouched and slightly up at SAR 399 bn by year-end. Consequently, the total public debt portfolio scaled to SAR 1.5 tn, climbing to 31.8% of GDP compared to the 29.9% originally estimated.