Saudi Arabia records largest budget deficit since Covid

• Q4 gap hits $25 billion
• Increase of 7% versus Q3
• Hit by declining oil revenue

Saudi Arabia’s budget deficit widened to SAR95 billion ($25 billion) in the fourth quarter of 2025, a 7 percent increase compared to Q3 and the largest in five years.

The deficit for all of last year hit SAR277 billion, more than the SAR245 billion officially projected and two-and-a-half times the SAR116 billion gap of 2024.

It marked the highest annual deficit since 2020, when the coronavirus pandemic battered the country’s finances. 

The wider deficit largely resulted from a year-on-year drop in oil revenue, which fell 20 percent from Q4 2024, the Ministry of Finance said. The price of a barrel of Brent crude fell from $76 at the start of 2025 to $62 at the beginning of this year.

Expenditure rose slightly to SAR371 billion in Q4 2025 from SAR358 billion in Q4 2024.

Revenues gained 3 percent quarter on quarter to SAR276 billion, driven by higher oil production, which contributed SAR154 billion in the fourth quarter versus SAR151 billion in the third quarter.

Non-oil revenue rose 3 percent quarter on quarter to SAR123 billion in the fourth quarter but was nearly flat year on year. 

The quarterly results come as the kingdom’s $1 trillion Public Investment Fund reviewed its epic spending plans and the government reshuffled its cabinet, including appointing a new investment minister.

The value of PIF contracts issued across the kingdom in 2025 was less than $30 billion, almost 60 percent below 2024’s $71 billion, according to data released by the Saudi Contractors Authority, amid cutbacks and a reprioritisation of projects.

Total revenues reached SAR1.1 trillion last year, while spending came to SAR1.4 trillion.

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Oil revenues for 2025 stood at SAR607 billion, down 20 percent year on year. Non-oil revenues reached SAR506 billion, up 1 percent.

Debt at the end of 2025 stood at SAR1.52 trillion, up from SAR1.22 trillion a year earlier.  

The ministry sees the deficit dropping to SAR165 billion in 2026, declining further to SAR120 billion in 2027 and rising slightly to SAR125 billion in 2028.

Projected revenue and expenditure for 2026, the start of the third phase of the kingdom’s Vision 2030 development programme, are SAR1.15 trillion and SAR1.31 trillion, respectively.

The ministry estimated economic growth at 4.4 percent for 2025, driven by a 5 percent expansion in non-oil activity. It projects 4.6 percent growth in 2026, again led by the non-oil sector, the statement added.

In June, the IMF raised its 2025 GDP growth forecast for Saudi Arabia to 3.6 percent from 3.0 percent and projected a 3.9 percent expansion in 2026.