Saudi Arabia’s 2025 Budget Projects Revenues of $315.5 Bn

The Saudi government affirmed its commitment to adopting strategic expansionary spending policies that support economic diversification and sustainable growth (Asharq Al-Awsat)
The Saudi government affirmed its commitment to adopting strategic expansionary spending policies that support economic diversification and sustainable growth (Asharq Al-Awsat)
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Saudi Arabia’s 2025 Budget Projects Revenues of $315.5 Bn

The Saudi government affirmed its commitment to adopting strategic expansionary spending policies that support economic diversification and sustainable growth (Asharq Al-Awsat)
The Saudi government affirmed its commitment to adopting strategic expansionary spending policies that support economic diversification and sustainable growth (Asharq Al-Awsat)

Saudi Arabia is forecasting total revenues of SAR1.184 trillion ($315.5 billion) for 2025, with expenditures expected to reach SAR1.285 trillion ($342 billion).

This would result in a projected deficit of SAR101 billion, driven by expansionary spending policies to support economic growth, according to the preliminary budget statement.

The economy is anticipated to grow by 4.6%, a rise from just 0.8% in 2023, with non-oil sectors expected to expand by 3.7%.

Finance Minister Mohammed Al-Jadaan reiterated the commitment to increase spending on essential services and execute strategic projects. He stated that the positive economic outlook reflects Saudi Arabia’s dedication to its ambitious plans.

For the current year, the Kingdom expects revenues and expenditures of SAR1.23 trillion and SAR1.35 trillion, respectively, which could lead to a deficit of SAR118 billion.

According to the preliminary budget statement from Saudi Arabia’s Ministry of Finance, total revenues for the fiscal year 2025 are expected to be around SAR1.184 trillion, rising to about SAR1.289 trillion by 2027.

Total expenditures for 2025 are estimated at approximately SAR1.285 trillion, increasing to around SAR1.429 trillion by 2027.

The statement highlighted that, due to ongoing economic developments and various financial initiatives, Saudi Arabia expects a budget deficit of about 2.3% of GDP for the fiscal year 2025. This deficit is part of efforts to improve stability and sustainability in the state budget.

It noted growth in GDP, primarily driven by non-oil sectors, which have bolstered industries like tourism, entertainment, transportation, logistics, and manufacturing.

This growth has improved quality of life, supported the private sector, and lowered unemployment to historic lows, positively impacting forecasts from international organizations and credit rating agencies.

For 2024, the report projects a real GDP growth rate of 0.8%, with non-oil sectors expected to grow around 3.7%.

Recent drops in interest rates are likely to boost demand and further support economic growth. Preliminary estimates also suggest that inflation could reach about 1.7% by the end of 2024.



Bank of England Cuts Main Interest Rate by a Quarter-point to 4.75%

Bank of England Deputy Governor for Monetary Policy Clare Lombardelli, Bank of England Governor Andrew Bailey, The Bank of England's Head of Media and Stakeholder Engagement Katie Martin and Deputy Governor, Markets and Banking, Dave Ramsden hold the central bank's Monetary Policy Report press conference at the Bank of England, in London, on November 7, 2024. HENRY NICHOLLS/Pool via REUTERS
Bank of England Deputy Governor for Monetary Policy Clare Lombardelli, Bank of England Governor Andrew Bailey, The Bank of England's Head of Media and Stakeholder Engagement Katie Martin and Deputy Governor, Markets and Banking, Dave Ramsden hold the central bank's Monetary Policy Report press conference at the Bank of England, in London, on November 7, 2024. HENRY NICHOLLS/Pool via REUTERS
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Bank of England Cuts Main Interest Rate by a Quarter-point to 4.75%

Bank of England Deputy Governor for Monetary Policy Clare Lombardelli, Bank of England Governor Andrew Bailey, The Bank of England's Head of Media and Stakeholder Engagement Katie Martin and Deputy Governor, Markets and Banking, Dave Ramsden hold the central bank's Monetary Policy Report press conference at the Bank of England, in London, on November 7, 2024. HENRY NICHOLLS/Pool via REUTERS
Bank of England Deputy Governor for Monetary Policy Clare Lombardelli, Bank of England Governor Andrew Bailey, The Bank of England's Head of Media and Stakeholder Engagement Katie Martin and Deputy Governor, Markets and Banking, Dave Ramsden hold the central bank's Monetary Policy Report press conference at the Bank of England, in London, on November 7, 2024. HENRY NICHOLLS/Pool via REUTERS

The Bank of England cut its main interest rate by a quarter of a percentage point on Thursday after inflation across the UK fell below its target rate of 2%.
The bank said its rate-setting panel lowered the benchmark rate to 4.75% — its second cut in three months — though its governor Andrew Bailey cautioned that interest rates would not be falling too fast over coming months.
“We need to make sure inflation stays close to target, so we can’t cut interest rates too quickly or by too much,” he said. “But if the economy evolves as we expect it’s likely that interest rates will continue to fall gradually from here.”
In the year to September, UK inflation stood at 1.7%, its lowest level since April 2021 and below the central bank’s target rate of 2%, The Associated Press reported.
Central banks worldwide dramatically increased borrowing costs from near zero during the coronavirus pandemic when prices started to shoot up, first as a result of supply chain issues built up and then because of Russia’s full-scale invasion of Ukraine which pushed up energy costs.
As inflation rates have recently fallen from multi-decade highs, the central banks have started cutting interest rates.
Economists have warned that worries about the future path of prices following last week's tax-raising budget from the new Labour government and the economic impact of US President-elect Donald Trump may limit the number of cuts next year.
The decision comes a week after Treasury chief Rachel Reeves announced around 70 billion pounds ($90 billion) of extra spending, funded through increased business taxes and borrowing. Economists think that the splurge, coupled with the prospect of businesses cushioning the tax hikes by raising prices, could lead to higher inflation next year.
The rate decision also comes a day after Trump was declared the winner of the US presidential election. He has indicated that he will cut taxes and introduce tariffs on certain imported goods when he returns to the White House in January. Both policies have the potential to be inflationary both in the US and globally, thereby prompting Bank of England policymakers to keep interest rates higher than initially planned.