The Saudi Ministry of Finance has revealed its 2025 budget projections, demonstrating a continued commitment to strategic spending to drive development and achieve the goals of Vision 2030. According to the preliminary statement, total expenditures are expected to reach SAR 1.388 trillion, a slight increase of 1% compared to the 2024 estimate of SAR 1.374 trillion. This figure reflects the government's focus on achieving fiscal sustainability while continuing to invest in vital sectors that serve citizens and support economic diversification.
Budget context within the framework of Vision 2030
This budget comes at a crucial stage in the national transformation journey that began with the announcement of Saudi Vision 2030. The Vision primarily aims to reduce reliance on oil as the main source of income and build a prosperous and diversified economy. Over the past years, Saudi budgets have focused on funding mega-projects such as NEOM, the Red Sea Project, and Qiddiya, in addition to developing infrastructure and strengthening non-oil sectors like tourism, entertainment, technology, and industry. The 2025 budget continues this approach, striving to achieve a delicate balance between spending on long-term projects and meeting the immediate needs of citizens and public services.
Analysis of key spending items
The breakdown of expenditures shows the government's priorities for the coming year, with compensation for public sector employees taking the largest share, confirming the focus on job stability and improving living standards.
Employee compensation and social benefits
The “Employee Compensation” item, which includes salaries, allowances, and bonuses, leads the budget with a total of SAR 574.53 billion, a 2% increase over the previous year. In contrast, the “Social Benefits” item, which covers direct support programs for families such as pensions and social security, saw a slight decrease of 2% to SAR 99.32 billion, which may reflect reviews of support mechanisms to ensure they reach those most in need.
Capital spending and financing expenditures
Spending on non-financial assets (capital expenditure) decreased by 12% to SAR 168.51 billion. This decline may indicate the completion of key phases in some infrastructure projects or the rescheduling of others to rationalize spending. Conversely, financing expenses, which represent interest payments on public debt, saw a significant jump of 22% to SAR 54.47 billion, reflecting increased government borrowing to finance the anticipated deficit and support strategic projects.
Importance and expected impact of the budget
The 2025 budget is of paramount importance both domestically and internationally. Domestically, it is expected to contribute to maintaining growth momentum in the non-oil sector, creating more job opportunities for citizens, and improving the quality of public services in the health and education sectors. Furthermore, continued government spending is a key driver for the private sector, which relies heavily on government contracts and projects.
Regionally and internationally, the budget sends a message of confidence to investors and global markets regarding the Saudi economy's ability to continue growing and adapting to global changes. With the Kingdom's increasing role as an influential economic power within the G20, its fiscal and spending plans are under close scrutiny, as its economic stability directly impacts global energy markets and financial stability in the region.
