Saudi Arabia has unveiled its 2025 budget, projecting $315 billion in revenues and $342 billion in expenditures with a $27 billion deficit.
Crown Prince Mohammed bin Salman highlighted the budget’s role in advancing Vision 2030 goals with continued spending on the Kingdom’s key Gigaprojects.
The budget also looks to boost private sector growth with job creation in sectors such as tourism and increasing global investment inflows.
Unveiling Saudi Arabia’s Budget 2025
The 2025 budget, a testament to the Kingdom’s unwavering commitment to economic diversification and sustainable development, projects revenues of 1,184 billion Saudi Riyals (approximately $315 billion) and expenditures of 1,285 billion Saudi Riyals (about $342 billion).
These figures, while impressive in their own right, tell only part of the story. Behind the numbers lies a carefully orchestrated strategy to propel Saudi Arabia towards its Vision 2030 goals, fostering innovation, enhancing competitiveness, and improving the quality of life for its citizens and residents alike.
Budget Overview and Economic Indicators
Let’s take a closer look at the complete financial framework in Saudi Arabia’s 2025 budget. The budget shows a clear path for the Kingdom’s economic future.
Key Budget Figures and Projections
The 2025 budget, a testament to the Kingdom’s unwavering commitment to economic diversification and sustainable development, projects revenues of 1,184 billion Saudi Riyals (approximately $315 billion) and expenditures of 1,285 billion Saudi Riyals (about $342 billion).
These figures, while impressive in their own right, tell only part of the story. Behind the numbers lies a carefully orchestrated strategy to propel Saudi Arabia towards its Vision 2030 goals, fostering innovation, enhancing competitiveness, and improving the quality of life for its citizens and residents alike.
GDP Growth and Economic Performance
The Kingdom’s economy looks set to expand, with real GDP growth expected to hit 4.6% in 2025. This is a big jump from the 0.8% estimate for 2024.
The non-oil sector has made remarkable progress and now makes up about 52% of GDP – a milestone that shows how far the Kingdom has come in diversifying its economy.
Deficit Analysis and Implications
The SR101 billion deficit is part of a planned “deficit by design” strategy that fits into a broader economic transformation plan. The numbers tell us:
- Total debt will reach SR1.3 trillion in 2025
- Debt-to-GDP ratio will be 29.9%
- Government reserves will stay stable at SR390 billion
This financial position strikes a balance between investing in future growth and being financially responsible. The Kingdom’s debt levels remain lower than most G20 nations.
Tax Revenue Expectations
A significant portion of the Kingdom’s revenue is expected to come from tax collections. The Ministry of Finance projects tax income to reach 379 billion Saudi Riyals in 2025, accounting for approximately 32% of total revenues.
This represents a 4% increase compared to the 2024 estimates, indicating a growing contribution from non-oil sources to the national coffers.
Breakdown of Tax Revenue:
- Goods and Services Taxes: These are expected to constitute the largest share, accounting for 77% of total tax revenue. This includes value-added tax (VAT) and other consumption-based taxes.
- Corporate Income Tax: With efforts to attract more businesses and foreign investment, corporate tax collections are anticipated to show steady growth.
- Personal Income Tax: While Saudi Arabia does not impose a personal income tax on its citizens, expatriate workers contribute through various fees and levies.
Vision 2030 Implementation Progress
The Vision 2030 implementation shows remarkable progress in many sectors. Program initiatives have seen annual spending rise by 33.8% since launch.
Non-oil Revenue Development
The Kingdom’s revenue structure has undergone a radical change. Non-oil activities now make up 52% of GDP, compared to 47% in 2016.
This structural transformation proves our diversification strategy works, despite the short timeframe of six years. Non-oil revenues now cover about 35% of total expenditures, up substantially from 17% in 2015.
Private Sector Participation
The private sector has made substantial gains, as shown by these key metrics:
| Indicator | Achievement |
| Saudi Unemployment Rate | Decreased to 7.1% (historic low) |
| Women’s Labor Participation | Reached 35.4% (exceeding 30% target) |
| Trade & Hospitality Growth | 6.4% year-on-year |
| Transport & Communications | 4.8% growth |
Investment and Development Projects
Several major initiatives showcase Saudi Arabia’s steadfast dedication to transformative projects:
- Electric Vehicle Infrastructure
- Building a manufacturing hub in King Abdullah Economic City
- Target: 150,000 vehicles by 2026, scaling to 500,000 by 2030
- Installation of 5,000 fast chargers planned by 2030
The National Investment Strategy continues to accelerate our economic transformation. We focus on creating an attractive business environment and developing vital sectors.
Moody’s projection of 5-5.5% non-hydrocarbon real GDP growth from 2025 to 2027 proves our strategic approach to economic diversification is right.
Sector Wise Spending Allocation
Saudi Arabia’s 2025 budget shows a strategic distribution that reinforces our dedication to security and social development.
Military and Defense Budget
The defense spending reaches $71.70 billion in 2024, with projections indicating an 8% compound annual growth rate through 2029. Our military sector completed its 10-year strategic plan.
This milestone positions us for the next phase of defense modernization. The defense acquisition budget will reach $20 billion in 2025. These numbers show our dedication to regional security.
Healthcare and Social Development
Strategic investments in social infrastructure help us prioritize our citizens’ basic needs. We remain focused on:
- Boosted healthcare facilities and services
- Expanded educational resources
- Strengthened social support systems
- Improved quality of life initiatives
Education
Continuing its long-standing commitment to human capital development, the Kingdom has allocated a significant sum to education. This investment aims to improve educational infrastructure, enhance curriculum quality, and support research and innovation initiatives.
Giga Projects
Continued funding for ambitious projects like NEOM, the Red Sea Project, Diriyah, ROSHN and Qiddiya, which are expected to drive tourism, create jobs, and attract foreign investment.
Infrastructure and Transportation
A considerable portion of the budget is directed toward infrastructure projects, including road networks, public transportation systems, and urban development initiatives. This investment is crucial for supporting economic growth and improving the quality of life in cities across the Kingdom.
Housing and Urban Development
In line with Vision 2030’s goal of increasing homeownership among Saudi citizens, substantial funds are allocated for housing projects and urban development programs.
Energy and Industry
Investments in the energy sector focus on diversifying the Kingdom’s energy mix, with increased allocations for renewable energy projects. The industrial sector also receives significant funding to support manufacturing and technology development localization.
Digital Transformation
Recognizing the importance of technology in driving economic growth, the budget includes substantial investments in digital infrastructure, e-government services, and support for the tech startup ecosystem.
Job Creation and Employment Initiatives
A central focus of Saudi Arabia’s 2025 budget is the creation of quality employment opportunities for its citizens, particularly the youth. This emphasis aligns with Vision 2030’s goal of reducing unemployment and increasing the participation of Saudis in the private sector workforce.
The budget outlines several initiatives and allocations to foster job creation and enhance employability.
Current Employment Landscape
Before delving into the initiatives, it’s important to understand the current employment scenario in Saudi Arabia:
- Unemployment Rate: As of the second quarter of 2024, the unemployment rate among Saudis has reached a historic low of 7.1%.
- Women’s Participation: The female labor force participation rate has surpassed the Vision 2030 target, reaching 35.4%.
- Youth Employment: Despite improvements, youth unemployment remains a challenge, necessitating targeted interventions.
Financial Management Strategy
Saudi Arabia’s 2025 financial management strategy balances fiscal stability and economic growth.
Debt Management Approach
Saudi Arabia has created a detailed debt management framework that puts sustainability and strategic borrowing first. Saudi Arabia’s projections show public debt will reach SAR 1,300 billion (29.9% of GDP) by 2025, a calculated rise from SAR 1,199 billion in 2024.
The National Debt Management Center executes Saudi Arabia’s annual borrowing plan that will give a sustainable debt profile while broadening our financing sources.
Financing Options and Credit Ratings
Saudi Arabia has successfully broadened its financing channels through various instruments and approaches:
| Financing Channel | Strategic Purpose |
| Bonds & Sukuk | Market depth improvement |
| Project Finance | Infrastructure development |
| Export Credits | Trade facilitation |
Major rating agencies have recognized Saudi Arabia’s careful financial management. Moody’s upgraded its rating to “Aa3” with a stable outlook. S&P Global affirmed its “A” rating with a positive outlook. These improvements highlight Saudi Arabia’s economic transformation and successful fiscal policies.
Reserve Management
The Saudi Central Bank (SAMA) government reserves will stay at SAR 390 billion through 2025, showing our steadfast dedication to fiscal stability. Our reserve management strategy centers on:
- Substantial liquidity buffers
- Better shock absorption capacity
- Long-term fiscal sustainability
Visionary Fiscal Blueprint
Saudi Arabia’s 2025 budget reflects its unwavering commitment to economic diversification, sustainable growth, and financial stability, all aligned with Vision 2030.
With a focus on empowering the private sector, enhancing local content, and fostering investment, the Kingdom is poised to navigate global challenges while creating unprecedented opportunities.
This strategic approach reinforces Saudi Arabia’s position as a key player in the global economy, driving progress and prosperity.
Upcoming Hotel Developments in Riyadh
Hilton Riyadh Olaya’s Opening
Hilton has launched its luxurious Hilton Riyadh Olaya in the center of Riyadh along King Fahd Road.
The hotel boasts 239 upscale guest rooms with impressive city views and offers unique facilities along with a variety of dining options, including the Greek-inspired Parea Brasserie.
This new addition further expands Hilton’s portfolio of luxury properties in Riyadh.
Novotel Riyadh Sahafa Hotel
The new Novotel Riyadh Sahafa Hotel, located in the lively Al Sahafa district of Riyadh, has been opened by Accor for guests.
Hessa Al Mazroa, the first female General Manager in the country for Accor, leads the hotel, which is conveniently situated near the King Abdullah Financial District (KAFD) and just 15 km from King Khalid International Airport.
With 232 luxurious and contemporary rooms and suites, a top-notch fitness center, an outdoor pool, a variety of dining options, and impressive views of Olaya Street, one of the bustling streets of Riyadh, the hotel is a prime destination for guests.
This marks Accor’s 9th Novotel property in Saudi Arabia as they continue to expand in the country.
Radisson Collection Residence Hotel
Radisson Hotel Group and Zamil Group have partnered to open of a five-star Radisson Collection Residence Hotel in Riyadh at the end of 2024.
This will mark the first Salmani architectural tower in Saudi Arabia, situated on the famous King Fahad Road.
The hotel is set to boast 170 luxurious rooms and suites, including 8 penthouses and 4 villas, as well as a rooftop swimming pool offering stunning views of the city.
This will be the 10th property of Radisson in Riyadh, in line with the city’s growing popularity as a global hub for both business and leisure.
Marriott W Riyadh
Marriott International and King Abdullah Financial District have reached an agreement to introduce the W Hotels brand to Riyadh’s KAFD.
The upcoming establishment, named W Riyadh, is set to launch in 2025 and will feature 210 lavish rooms and suites, as well as 7 diverse dining options and spacious event venues, including signature W brand areas such as the AWAY Spa and FIT fitness center.
This collaboration is in line with KAFD’s goal to become the most renowned and cutting-edge business district globally, which is currently housing Saudi Arabia’s Public Investment Fund and various multinational companies.
IHG and Regent Hotels Luxury Hotels in KAFD
IHG Hotels & Resorts will be expanding their presence in Riyadh’s King Abdullah Financial District (KAFD) with the opening of two new luxury hotels – Regent Riyadh KAFD and InterContinental Riyadh KAFD by January 2027,
Visitors will have the opportunity to experience the stunning architecture of KAFD and dine at world-class restaurants in the world’s largest LEED-certified mixed-use business district when IHG’s first KAFD hotel, Kimpton at KAFD, opens later this year.
The Rotana Group Hotels
The Rotana Hotel Group has announced its plans to double its presence in Saudi Arabia by launching 8 new hotels within the Kingdom in the upcoming four years.
This announcement was made during the recent Saudi Tourism Forum held in Riyadh to expand to a total of 16 properties and 4,400 guest rooms. The growth plan encompasses the development of new hotels in Riyadh, Madinah, Khobar, and Al Baha.
These hotel developments will redefine luxury hospitality standards and contribute to Saudi Arabia’s vision of becoming a leading global tourism destination.
Keep Reading: Hilton Officially Opens Its New Hilton Riyadh Olaya Hotel
