Saudi Arabia's Fiscal Challenges Amid Oil Revenue Decline
Saudi Arabia's budget deficit soared to $15.65 billion in Q1 2025 due to an 18% drop in oil revenues. The nation is seeing growth in non-oil revenues and plans a GDP rise to 4.6% in 2025, though low oil prices continue to impact the fiscal situation.
Saudi Arabia's budget deficit surged to $15.65 billion in the first quarter of 2025, significantly up from $3.30 billion a year prior, as oil revenue fell by 18% to 149.810 billion riyals, according to the finance ministry's latest report.
The decline in oil prices, alongside voluntary production cuts, has adversely affected top oil exporter Saudi Arabia's revenue streams. Despite a 2% rise in the kingdom's non-oil revenues to 113.806 billion riyals, total revenue fell by 10% in Q1 2025. Meanwhile, public spending increased by 5% to 322.317 billion riyals as the nation continues to invest in Vision 2030.
Although Saudi Arabia predicts a 4.6% GDP growth in 2025 driven by non-oil sectors, the IMF has revised its GDP growth estimate for the kingdom down to 3%. Acknowledging persistent low oil prices, Saudi officials have indicated they do not plan to further cut oil supply, aligning with OPEC+ strategies to boost output from May through June.
(With inputs from agencies.)
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