KSA’s economic growth soars: A promising outlook for 2025 
Following the notable fiscal and economic performance of 2024, driven by non-oil and government activities, including the private sector’s remarkable performance, the Saudi economy is expected to continue showing impressive results in 2025.
This projection is based on the government’s efforts to achieve Saudi Vision 2030 objectives, which focus on implementing comprehensive fiscal and economic structural reforms.
According to the Ministry of Finance, preliminary estimates indicate that the Kingdom’s real gross domestic product will grow by 4.6 percent in 2025, compared to 0.8 percent in 2024 and -0.8 percent in 2023.
This growth is driven by an increase in the GDP of non-oil activities, the expected growth of the private sector’s contribution to non-oil GDP, and the government’s efforts to enhance economic diversification, develop the labor market, create sustainable job opportunities and improve the business environment.
The Kingdom’s real GDP is expected to reach $1.161 trillion in 2025, up from $1.091 trillion in 2024, representing a 6.4 percent increase.
The inflation rate is expected to rise to 1.9 percent in 2025, up from 1.7 percent in 2024.
The projected significant growth in the Saudi economy positively impacts the Kingdom’s fiscal budget for 2025, with increases in both total revenues and expenditures.
Financial reforms will continue to enhance economic growth and improve public finance management, with a focus on raising the quality of services provided to citizens, residents and visitors.
Total revenues are estimated at $315.7 billion, with expectations to reach $343.7 billion by 2027. Total expenditures are estimated at $342.7 billion in 2025 and are projected to rise to $381.1 billion by 2027.
The projected budget deficit is expected to reach $26.9 billion in 2025, representing 2.3 percent of the Kingdom’s GDP.
The budget deficit is likely to remain at a similar level to 2025 over the medium term, reaching $34.7 billion and $37.3 billion in 2026 and 2027, respectively, representing -2.9 percent and -3.0 percent of GDP.
The Saudi government has projected funding needs of $37.1 billion for 2025, intended to cover the anticipated budget deficit and the repayment of maturing debt, estimated at about $10.1 billion.
It is expected that the government will continue borrowing over the medium term to meet its financing needs.
Public debt is expected to reach $346.7 billion, $381.3 billion and $418.7 billion in 2025, 2026 and 2027, respectively, representing 29.9 percent, 32.2 percent and 33.3 percent of the Kingdom’s GDP.
It is worth noting that the main reason behind the increase in government spending in the coming years is the government’s commitment to advancing its reforms to achieve the goals of Saudi Vision 2030.
Despite the expected budget deficit and the rise in public debt in 2025, the Kingdom’s economic outlook remains promising, especially considering the contraction in the oil sector due to voluntary production cuts and the government’s commitment to achieving the economic transformation goals of Saudi Vision 2030.
Financial reforms will continue to enhance economic growth and improve public finance management, with a focus on raising the quality of services provided to citizens, residents and visitors.
• Talat Zaki Hafiz is an economist and financial analyst. X: @TalatHafiz
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