Saudi Arabia Revises Down Mid-Term Revenue Expectations

4 Oct 2024 Issue: 67 / 40 By: Jamie Ingram

This year’s forecast deficit has been revised up by nearly 50% to $31.5bn as Saudi Arabia prioritizes financing its economic reform agenda. With debt levels manageable, Riyadh can continue to run up deficits in the medium-term as it pursues Vision 2030.

Saudi Arabia’s Ministry of Finance released its pre-budget statement for 2025 on 31 September, emphasizing its commitment to growing the non-oil sector to strengthen the economy. As such, government expenditure is projected to remain robust out to end-2027, despite the revenue outlook being revised down amid a lower oil-price environment.

The continued investment commitment despite the revenue downturn means that the ministry forecasts deficits each year between now and 2027 for a cumulative $130bn over the four-year 2024-2027 period. However, as a percentage of GDP, the annual deficit tops out at just 3% over this period, and the ministry is confident that “The Kingdom has a strong fiscal position, with the existence of financial reserves and sustainable levels of public debt.” (CONTINUED - 922 WORDS)