As 2025 begins, Saudi Arabia is poised to shape its economic future and drive comprehensive development across the Kingdom alongside its plans for Vision 2030. 

In an effort to uphold these goals, Saudi Arabia’s Minister of Finance, Mohammed Abdullah Aljadaa, has given the green light for the Annual Borrowing Plan of $37 billion (139 billion Saudi riyals) for the fiscal year 2025. This was announced in a statement earlier this month following its approval from the Kingdom's National Debt Management Center to cover the potential budget deficit.

Last November, the ministry estimated a budget deficit of  SAR101 billion ($26.9 billion) for 2025, with nearly SAR38 billion ($10.1 billion) of debt repayment.

This borrowing plan will help the Saudi economy diversify local and international financing channels to meet the funding requirements for 2024 by modes such as issuing sovereign debt

instruments at a fair cost. Moreover, it outlines extensive advancements in the public debt management landscape planned last year. These initiatives are aimed at enhancing local debt markets, as well as the funding strategy and guiding principles for 2025, including the issuance calendar for the Local Saudi Sukuk Issuance Program in Saudi Riyal.

Understanding the 2025 Borrowing Plan

The borrowing plan was initiated to cover two primary financial obligations that drive Saudi’s economy. They are: 

Budget Deficit Coverage 

The Saudi government projects a budget deficit of 101 billion riyals ($26.88 billion) for 2025. The finance minister said the Kingdom will continue to spend on massive megaprojects and make substantial investments in Vision 2030 initiatives, which are intended to lessen the economy’s reliance on oil. 

Total expenditure for 2025 is projected at 1.285 trillion riyals, whereas the total revenue forecast stands at 1.184 trillion riyals.

The projected deficit is in line with a preliminary government projection made in September last year, equating to about 2.3% of gross domestic product. One of the primary goals of the borrowing plans is to cover this fiscal deficit and chart a bold economic future. 

2. Debt Repayment

An additional 38 billion riyals from the borrowing plan is allocated for the repayment of principal amounts on debts maturing this year. This allows Saudi Arabia to maintain their creditworthiness and investor confidence, potentially attracting foreign direct investment while facilitating economic growth. 

What to Expect 

The Saudi government will borrow money by issuing sovereign bonds to investors and through direct bank loans. 

The Government authorities made a statement saying that they took $2.5 billion in three-year loans from Abu Dhabi Islamic Bank, Credit Agricole SA, and Dubai Islamic Bank in 2024. All Saudi-issued bonds were dominated in dollars last year, but in 2025, the Kingdom may shift to issue them in multiple currencies to diversify the risks. 

Crown Prince Mohammed bin Salman (MbS) is already raising funds to implement his Vision 2030 agenda. He hopes to expand the economy by investing hundreds of billions of dollars in multiple projects.

Borrowing from banks and issuing bonds is necessary to balance the forecasted budget for the economy. Currently, oil is being traded at around $76 per barrel on world markets. The International Monetary Fund (IMF) predicts that a price of more than $90 per oil barrel is required to fund the Saudi budget in 2025. 

Regardless of heavy borrowing, the Kingdom maintains an excellent credit rating. In November last year, Moody’s Investor Service upgraded the country’s credit rating from A1 to Aa3, which keeps it in line with that of France and the UK.

In mid-2024, Saudi also made a statement on plans to scale back on the capacity of its huge futuristic and green megacity, NEOM, which was initially planned to cost $1.5 trillion. Additionally, The Line–a subproject within NEOM intended to accommodate 1.5 million people, will now aim to accommodate just 300,000 people due to the reduced capacity. 

"As an office solutions provider, TEC is hopeful that Saudi Arabia’s $37 billion borrowing plan for 2025 will drive economic growth and create opportunities for businesses like ours to thrive. With significant investments in transformative projects and infrastructure, the plan aligns with the ambitious goals of Vision 2030, fostering a modern and dynamic environment for enterprises in the country.” Paul Salnikov, CEO of The Executive Centre, a pioneer in offering flexible workspace solutions to meet the modern needs in the GCC. 

Vision For the Future 

The Ministry of Finance emphasised that the country will be adopting a dynamic strategy to achieve the country’s ambitious funding targets for this year. 

“We are optimistic that the resulting economic diversification and development will open new avenues for innovation and collaboration, enabling businesses across sectors to contribute to and benefit from the Kingdom's futuristic growth strategy." Salnikov added while reflecting on the plans the Ministry of Finance announced for 2025. 

The finance ministry’s statement highlights the potential of emerging markets while exploring new opportunities through strategic and meaningful partnerships. Key focus areas include export credit agency-backed initiatives, infrastructure financing, and capital expenditure projects as starting points for renewed funding efforts.