Positive indicators for the Saudi economy in the 2025 budget
The Saudi Ministry of Finance's 2025 budget projections reveal continued strong growth in non-oil revenues, which are expected to reach SAR 505.28 billion. This figure represents a 1% increase compared to the previous year's 2024 projections of SAR 502.47 billion, underscoring the Kingdom's steady progress towards diversifying its revenue streams and reducing its reliance on oil.
Conversely, estimates indicate a projected decline in oil revenues for 2025, reaching SAR 606.54 billion, a 20% decrease from the SAR 756.62 billion generated in 2024. This divergence between oil and non-oil revenue trajectories reflects the success of the economic strategies implemented and the resilience of the Saudi economy in the face of global energy market volatility.
Vision 2030: The main driver for economic diversification
This structural shift in revenue sources is one of the most significant outcomes of Saudi Vision 2030, the ambitious plan launched by Crown Prince Mohammed bin Salman in 2016. The vision primarily aims to build a prosperous and sustainable economy that is not heavily reliant on oil revenues. Since its launch, the Kingdom has worked to develop new and promising economic sectors such as tourism, entertainment, technology, industry, and logistics, while also empowering the private sector to become a key driver of growth.
The growth of non-oil revenues is not just a number in the budget, but a direct reflection of the success of economic and financial reforms, such as the implementation of value-added tax, the expansion of the tax base, and increased collection efficiency, in addition to attracting huge foreign and local investments in major projects such as NEOM, the Red Sea and Qiddiya.
Details of non-oil revenues and their impact
Non-oil revenues consist of several main sources, and budget data has shown mixed performance among its components:
- Taxes on goods and services: topped the list with expected revenues of 294.34 billion riyals, a 2% increase over the previous year, mainly including value-added tax.
- Taxes on income, profits and capital gains: recorded remarkable growth of 8% to reach 34.06 billion riyals, reflecting increased commercial and investment activity.
- Other revenues: which include central bank profits, government service fees and fines, amounted to 116.36 billion riyals, registering a decline of 5%.
Domestically, this growth contributes to strengthening the Kingdom's financial stability, providing sustainable funding for development projects and public services such as health, education, and infrastructure, and creating new job opportunities for citizens. Regionally and internationally, this transformation enhances Saudi Arabia's position as a diversified and stable economic power, increasing its attractiveness to international investors seeking safe and profitable investment environments, insulated from the volatility of oil markets.
