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PwC: Saudi Arabia Balances Fiscal Discipline with Ambitious Investment Goals

A view of the Saudi capital, Riyadh. (SPA)
A view of the Saudi capital, Riyadh. (SPA)
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PwC: Saudi Arabia Balances Fiscal Discipline with Ambitious Investment Goals

A view of the Saudi capital, Riyadh. (SPA)
A view of the Saudi capital, Riyadh. (SPA)

A recent report by global consulting firm PwC on the 2025 Middle East economic outlook highlighted the region’s sustained growth, primarily driven by a strong non-oil sector.

Fluctuations in the oil market have renewed the focus on fiscal discipline, particularly in Saudi Arabia, which is recalibrating its priorities to balance financial prudence with ambitious investment goals. The Kingdom is emphasizing private sector growth and major infrastructure projects to boost tourism and improve residents’ quality of life.

At the same time, the report noted that Gulf countries are reforming corporate tax systems to align with the Organization for Economic Cooperation and Development’s (OECD) global tax rules on Base Erosion and Profit Shifting. This shift underscores their commitment to diversifying revenue sources. Despite economic headwinds, business leaders remain optimistic about the region’s future prospects.

Richard Boxshall, Partner and Chief Economist at PwC Middle East, stated in an interview with Asharq Al-Awsat that Saudi Arabia is adopting a calculated approach by reprioritizing expenditures and focusing on value-driven investments to balance fiscal discipline with large-scale infrastructure projects.

He noted that although the Saudi government anticipates a $27 billion fiscal deficit in 2025, it remains committed to maximizing economic and social impact through targeted investments in infrastructure, tourism, and technology-driven sectors.

The Kingdom is also accelerating private sector participation and privatization initiatives to share project costs, reduce public spending, and leverage sovereign wealth funds and development funds to finance key projects without excessive reliance on government expenditure. This approach ensures that Vision 2030 investments continue to drive economic transformation while maintaining long-term fiscal sustainability.

Boxshall highlighted Saudi Arabia’s progress under its Vision 2030, with over 5,000 projects worth $5 trillion currently underway. These include Riyadh Metro, which improves urban mobility; Diriyah Gate, which preserves cultural heritage while boosting tourism; and New Murabba, an ambitious real estate project.

The Kingdom is also investing heavily in renewable energy, aiming to cut carbon emissions and develop a sustainable energy mix through projects, such as the Sakaka Solar Plant and the Dumat Al-Jandal Wind Farm.

The report highlighted OPEC+’s decision to extend voluntary oil production cuts until 2026 to stabilize prices amid slowing demand growth, particularly in China. However, global uncertainties, including US energy policies, have contributed to market volatility. PwC estimates that Brent crude prices will average around $70 per barrel in 2025, down from $80 in 2024.

Boxshall noted that Gulf governments are adjusting fiscal policies and expenditures based on oil price forecasts, ensuring financial sustainability while maintaining economic growth plans. Countries in the region are accelerating non-oil investments in sectors, such as logistics, finance, tourism, and technology to diversify their economies.

To broaden revenue sources, Gulf economies are implementing global minimum tax rules under OECD and G20 frameworks, set to take effect in 2025. This move is expected to generate additional tax revenues while enhancing regulatory stability for businesses.

Boxshall explained that ongoing tax reforms in the region create a more predictable and structured tax environment for companies, supporting long-term investments and economic stability. While businesses will need to adapt to new compliance requirements, the overall commercial climate remains attractive, with competitive tax rates, strategic incentives, and economic growth in non-oil sectors.

According to PwC’s CEO survey, business leaders in the Middle East remain highly optimistic about the future, outpacing global counterparts. Ninety percent of CEOs in the Gulf expected revenue growth in 2025, while 77 percent of Saudi CEOs expressed confidence in local economic expansion, compared to 57 percent globally.

Boxshall attributed this optimism to national transformation plans that drive infrastructure, tourism, and technology investments, as well as a strong investment climate in Gulf Cooperation Council countries. He also pointed to business-friendly policies, tax incentives, and economic resilience as factors strengthening the region’s position as a global trade and investment hub.

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Saudi EXIM Bank Signs Trilateral MoU with Poland’s BGK and KUKE

The MoU enhances collaboration among the three parties in export support, financing, and insurance - SPA
The MoU enhances collaboration among the three parties in export support, financing, and insurance - SPA
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Saudi EXIM Bank Signs Trilateral MoU with Poland’s BGK and KUKE

The MoU enhances collaboration among the three parties in export support, financing, and insurance - SPA
The MoU enhances collaboration among the three parties in export support, financing, and insurance - SPA

Saudi Export-Import Bank (Saudi EXIM Bank) has signed a memorandum of understanding with two Polish financial institutions, Bank Gospodarstwa Krajowego (BGK) and Polish export credit agency (KUKE), strengthening cooperation in export support, financing, and insurance, and expanding trade and investment between Saudi Arabia and the Republic of Poland.

According to a press release issued by the Saudi EXIM Bank today, the agreement was signed by Saudi EXIM Bank Deputy CEO Dr. Naif bin Abdulrahman Al-Shammari, Member of the Board of BGK Mateusz Szczurek and CEO and President of the Board of KUKE Janusz Władyczak during the Saudi-Polish Investment Forum, SPA reported.

The MoU enhances collaboration among the three parties in export support, financing, and insurance, including export-related co-financing, guarantees, insurance, and reinsurance. It also promotes the exchange of information and expertise relating to export credit policies and practices, in addition to organizing meetings, workshops, training programs, and capacity-building initiatives.

The release added that the agreement enables Saudi and Polish companies to explore joint business and project opportunities of mutual interest, while facilitating access to non-oil export markets for both countries through cooperation among export finance and guarantee institutions.

On this occasion, Al-Shammari stated: “This memorandum comes as an extension of Saudi EXIM’s efforts to build high-quality partnerships with global export finance and credit insurance institutions, and to establish a cooperation framework that enables exporters and buyers in Saudi Arabia and Poland to access new markets. Through this cooperation, we look forward to enhancing the flow of mutual trade and investment and opening broader horizons for companies to benefit from the opportunities available in both countries.”

The signing of this MoU aligns with Saudi EXIM Bank's strategy to build effective partnerships with export finance and credit guarantee institutions worldwide, supporting the growth and competitiveness of Saudi non-oil exports in regional and global markets, in line with the objectives of Vision 2030.

Business

Oil Gains as Traders Weigh Supply Risks Linked to US–Iran Tensions

A pumpjack, used to help lift oil from a well, in the Permian basin near Midland, Texas, US, October 8, 2025. REUTERS/Arathy Somasekhar/File Photo
A pumpjack, used to help lift oil from a well, in the Permian basin near Midland, Texas, US, October 8, 2025. REUTERS/Arathy Somasekhar/File Photo
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Oil Gains as Traders Weigh Supply Risks Linked to US–Iran Tensions

A pumpjack, used to help lift oil from a well, in the Permian basin near Midland, Texas, US, October 8, 2025. REUTERS/Arathy Somasekhar/File Photo
A pumpjack, used to help lift oil from a well, in the Permian basin near Midland, Texas, US, October 8, 2025. REUTERS/Arathy Somasekhar/File Photo

Oil prices edged up on Tuesday as traders gauged the potential for supply disruptions after US guidance for vessels transiting the Strait of Hormuz kept attention squarely on tensions between Washington and Tehran.

Brent crude oil futures were up 37 cents, or 0.5%, at $69.41 a barrel by 1136 GMT. US West Texas Intermediate crude rose 25 cents, or 0.4%, to $64.61.

"The market is still focused on the tensions between Iran and the US," said Tamas Varga, an oil analyst at brokerage PVM.

"But unless there are concrete signs of supply disruptions, prices will likely start going lower," he said. "The market is range-bound, it's an oversupplied market against geopolitics."

Prices rose more than 1% on Monday, when the US Department of Transportation's Maritime Administration advised US-flagged commercial vessels to stay as far from Iran’s territorial waters as possible and to verbally decline Iranian forces' permission to board if asked.

About a fifth of the oil consumed globally passes through the Strait of Hormuz between Oman and Iran, making any escalation in the area a major risk to global oil supplies.

Iran and fellow OPEC members Saudi Arabia, the United Arab Emirates, Kuwait and Iraq export most of their crude via the strait, mainly to Asia.

The guidance was issued despite Iran's top diplomat saying last week that Oman-mediated nuclear talks with the US were off to a "good start" and set to continue.

Goldman Sachs analysts wrote in a note on Tuesday that prices were supported by geopolitics, with a pickup in oil on vessels as buyers seek to secure more oil amid heightened uncertainty.

"While talks in Oman produced a cautiously positive tone, lingering uncertainty over potential escalation, sanctions tightening, or supply disruptions in the Strait of Hormuz has kept a modest risk premium intact," said Tony Sycamore, an analyst at IG.

Meanwhile, the European Union has proposed extending its sanctions against Russia to include ports in Georgia and Indonesia that handle Russian oil, the first time the bloc would target ports in third countries, according to a proposal document seen by Reuters.

The move is part of efforts to tighten sanctions on Russian oil, a key source of revenue for Moscow, over the war in Ukraine.

Indian Oil Corp bought six million barrels of crude from West Africa and the Middle East, traders said, as India steered clear of Russian oil in New Delhi's push for a trade deal with Washington, which the countries hope to conclude in March.

Business

AlUla Conference Urges Emerging Economies to Act Decisively, Define Their Own Growth Models

Saudi Arabia’s Minister of Finance addresses attendees at the AlUla Conference for Emerging Market Economies (Asharq Al-Awsat). 
Saudi Arabia’s Minister of Finance addresses attendees at the AlUla Conference for Emerging Market Economies (Asharq Al-Awsat). 
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AlUla Conference Urges Emerging Economies to Act Decisively, Define Their Own Growth Models

Saudi Arabia’s Minister of Finance addresses attendees at the AlUla Conference for Emerging Market Economies (Asharq Al-Awsat). 
Saudi Arabia’s Minister of Finance addresses attendees at the AlUla Conference for Emerging Market Economies (Asharq Al-Awsat). 

The AlUla Conference for Emerging Market Economies concluded with a clear call for emerging nations to move beyond imitation and take ownership of their economic futures, as global uncertainty reshapes trade, finance and development models.

Speakers stressed that emerging markets now possess the confidence and capacity to set their own standards and compete globally on their own terms.

Conference discussions reflected a growing shift in mindset among emerging economies, which are increasingly positioning themselves as influential players in the global economy rather than peripheral participants.

A central theme was the expanding role of the private sector, which participants described not only as a partner in development but as a primary engine of sustainable growth.

Saudi Finance Minister Mohammed Al-Jadaan emphasized the need for decisive reform, regardless of political or economic difficulty. He rejected the notion of a “perfect time” for change, urging emerging economies to diagnose their own challenges and take responsibility for addressing them without waiting for external direction.

Speaking during the conference’s closing session on Monday, Al-Jadaan said postponing necessary reforms only increases their cost. He noted that successful structural transformation depends on bold leadership and an acceptance that meaningful economic reform inevitably requires difficult decisions.

Transparency, he said, remains central to Saudi Arabia’s Vision 2030, particularly in building trust with citizens, investors and international partners. Al-Jadaan revealed that more than 87 per cent of Vision 2030 initiatives have been completed or are on track, while 93 per cent of key performance indicators have been achieved or are progressing as planned.

He cited artificial intelligence as an example of adaptive policymaking, noting that while the technology was not initially a dominant focus, changing global conditions required adjustments to ensure Saudi Arabia captures its economic value.

In the same closing dialogue, International Monetary Fund Managing Director Kristalina Georgieva called on governments to shift from directly managing economies to enabling them. She said reducing state control over companies is essential to unlocking innovation and allowing the private sector to flourish.

Georgieva highlighted the mounting challenges facing emerging economies, including geopolitical tensions, demographic change and climate pressures, all of which have increased global uncertainty and made international cooperation indispensable.

Despite differing national circumstances, she said emerging economies share a common goal of building strong institutions and pursuing sound fiscal and monetary policies to enhance resilience.

She also underscored the role of international financial institutions in sharing best practices and supporting a more integrated global economy, concluding with a symbolic message: “One hand does not clap,” to emphasize the importance of partnership in achieving shared prosperity.

The second edition of the AlUla Conference for Emerging Market Economies was hosted in AlUla in partnership between Saudi Arabia’s Ministry of Finance and the International Monetary Fund, bringing together finance ministers, central bank governors, international financial leaders and experts from around the world at a time of heightened global economic uncertainty.