Saudi budget 2025 actuals: deficit hits SAR 277B, revenues drop 6.1% despite GDP growth

Saudi Arabia’s 2025 budget story ends with a number that does not match the optimism people expect from a growing economy. According to the Ministry of Finance, the actual budget deficit reached approximately SAR 277 billion by the end of 2025, or 5.8% of GDP, versus an approved deficit of around SAR 101 billion (2.3% of GDP). The reason is also spelled out: total revenues fell by around 6.1% compared to the approved budget, mainly because oil revenues declined.

But this report is not a tale of collapse. Real GDP still grew by 4.6% in 2025, driven by strong growth in non-oil activities, which increased by 5.1%, while oil activities grew by 5.7%. So the headline tension is real, and it matters for anyone tracking the kingdom’s economic engine: fiscal strain rose even as the production side stayed productive.

To understand why the deficit widened, start with the revenue split. In 2025, total revenues recorded a decrease of around 6.1% versus the approved budget, attributed mainly to a decline in oil revenues. Non-oil revenues, however, increased by approximately 5.3% compared to the approved budget estimates. That non-oil resilience was not just a lucky offset. The Ministry of Finance ties it to continued initiatives to enhance non-oil revenues and sustained growth in non-oil activities. In other words, diversification helped, but it did not fully cancel the oil revenue hit.

On the spending side, the budget did the opposite of “wait and see.” Total expenditure increased by approximately 8% compared to the approved budget. The report links that increase to progress in achieving Saudi Vision 2030 objectives and efforts to direct spending toward development of public facilities and essential services. It also points to broader goals like expanding economic diversification, advancing structural reforms, and stimulating economic growth through multiple projects. If you are used to fiscal tightening when markets get noisy, the direction here is more “invest and adapt,” even while revenues wobble.

The fiscal sustainability balancing act shows up in the broader balance sheet numbers. By end-2025, public debt reached approximately SAR 1.519 trillion (31.8% of GDP) compared to about SAR 1.300 trillion in the approved budget (29.9% of GDP). Government reserves amounted to around SAR 399 billion by the end of 2025. These figures matter because they quantify what “deficit expansion” becomes in practice: more reliance on financing capacity, and a buffer that policymakers will watch closely when external conditions shift.

The report also frames the macro backdrop beyond fiscal lines. Inflation in Saudi Arabia remained relatively low versus global levels. The Consumer Price Index (CPI) registered 2% in 2025, slightly higher than the 1.9% estimated in the budget, but below the global rate of 4.1% referenced via the IMF’s World Economic Outlook (WEO). Meanwhile, labor market data shows continued improvement. Saudi unemployment reached 7% in 2025, achieving the target set under Saudi Vision 2030, according to the Labor Force Survey published by the General Authority for Statistics (GaStat). At the same time, Saudi female participation rates in the labor market declined to 34.8% in 2025, and administrative records statistics indicate growth in private sector employment, with the number of Saudi employees in the private sector reaching 2.5 million in Q4 2025, a 5.8% increase compared to the same period last year.

External sector performance adds another layer: the kingdom did not just run internally. The merchandise trade balance recorded a surplus of SAR 220.10 billion in 2025, supported by continued growth in non-oil exports, including re-exports, which increased by approximately 18.9%. Merchandise imports increased by about 8.8% in 2025, with 69.2% accounted for by intermediate and capital imports. Those imports grew by 13.8% compared to last year, which the report reads as sustained demand for production inputs and capital goods that support expansion and productive capacity. On the balance of payments, net travel items maintained a positive performance with a surplus of SAR 49.40 billion, reflecting continued tourism sector growth. Net foreign direct investment (FDI) inflows reached SAR 122.40 billion in 2025, up 52.9% year over year, highlighting continued attractiveness of the domestic investment environment.

Finally, the budget report itself is part of a governance push, and that affects how markets interpret the numbers. The Ministry of Finance presents key economic indicators and the reasons for deviations from approved estimates, positioning this as part of transparency and fiscal disclosure initiatives aligned with Saudi Vision 2030. The report notes a series of budget reports designed to support periodic fiscal performance publishing and disclosure, and it lists additional reports the ministry aims to develop, such as Budget Statement, Pre-Budget Statement, Citizen’s Version, Budget Quarterly Performance Reports, and Mid-Year Economic and Fiscal Performance Reports.

If you are an investor, operator, or board member assessing “fiscal risk” versus “growth quality,” the stakes here are practical. The kingdom managed real growth, kept inflation contained, and improved trade and investment indicators, but the fiscal math tightened sharply because revenue fell, particularly from oil. The second-order implication is that future decisions will likely live at the intersection of two questions: can non-oil revenue gains stay strong enough to offset oil volatility, and can spending growth keep delivering Vision 2030 outcomes without pushing debt and deficit higher than planned.