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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)
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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.

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Japan's Incoming PM Ishiba Calls for Loose Monetary Policy

Shigeru Ishiba, the newly elected leader of Japan's ruling party, the Liberal Democratic Party (LDP) poses in the party leader's office after the LDP leadership election, in Tokyo, Japan September 27, 2024. REUTERS
Shigeru Ishiba, the newly elected leader of Japan's ruling party, the Liberal Democratic Party (LDP) poses in the party leader's office after the LDP leadership election, in Tokyo, Japan September 27, 2024. REUTERS
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Japan's Incoming PM Ishiba Calls for Loose Monetary Policy

Shigeru Ishiba, the newly elected leader of Japan's ruling party, the Liberal Democratic Party (LDP) poses in the party leader's office after the LDP leadership election, in Tokyo, Japan September 27, 2024. REUTERS
Shigeru Ishiba, the newly elected leader of Japan's ruling party, the Liberal Democratic Party (LDP) poses in the party leader's office after the LDP leadership election, in Tokyo, Japan September 27, 2024. REUTERS

Japan's incoming prime minister, Shigeru Ishiba, said on Sunday the country's monetary policy must remain accommodative as a trend, signaling the need to keep borrowing costs low to underpin a fragile economic recovery.
It was not immediately clear whether Ishiba, who had been a vocal critic of the Bank of Japan's past aggressive monetary easing, was taking a more dovish line with his remarks.
“It's something the Bank of Japan, which is mandated to achieve price stability, will decide while working closely with the government,” Ishiba told public broadcaster NHK, when asked about further interest rate increases by the central bank.
“From the government's standpoint, monetary policy must remain accommodative as a trend given current economic conditions,” he said.
On fiscal policy, Ishiba said he will aim to compile a package of measures at an early date to cushion the economic blow from rising living costs, with a focus on helping low-income households.
Ishiba, a former defense minister, is set to become prime minister on Tuesday after winning the presidency of the ruling Liberal Democratic Party on Friday.
After his victory, Ishiba said monetary policy would broadly remain loose but suggested he would not push back against further increases in still near-zero interest rates.
The BOJ ended negative interest rates in March and raised short-term borrowing costs to 0.25% in July in a landmark shift away from a decade-long, radical stimulus program.
BOJ Governor Kazuo Ueda has signaled a readiness to raise rates further if Japan makes progress towards durably achieving the bank's inflation 2% target, as the board projects it will.
Ishiba told Reuters in August that the BOJ was on the “right policy track” by ending negative rates and endorsed further normalization of monetary policy, saying it could boost industrial competitiveness.
But in an interview this month, he said Japan must prioritize making a full exit from deflation and warned of weak signs in consumption.
The yen, which fell on Friday on news that a dovish rival would join Ishiba in a run-off for the LDP leadership, rebounded on his victory.