Saudi Arabia has adopted the annual borrowing plan for the fiscal year 2025 (FY 2025), reported the Saudi Press Agency.
The plan, released on Sunday, January 5, 2025, outlined developments in public debt for 2024, introducing a strategic roadmap for meeting Saudi Arabia’s funding needs.
2025 Borrowing Plan
On Sunday, the Saudi Minister of Finance, Mohammed Al-Jadaan, approved the annual borrowing plan for FY 2025, after the Board of Directors of the National Debt Management Center (NDMC) endorsed it.
The plan provides details about the key developments in public debt for 2024, initiatives that aim to bolster local debt markets, and the funding plan for 2025 and its guiding principles. Furthermore, it includes the 2025 calendar for the Local Saudi Sukuk Issuance Program in Saudi Riyal.
Borrowing Plan Details
The plan estimates the funding needs for 2025 at approximately SAR 139bn ($37bn). This amount will cover two main components. The first is the projected budget deficit of SAR 101bn for FY 2025, as the Ministry of Finance highlighted in its Budget Statement.
Meanwhile, the amount is intended to cover the principals’ repayment of the debts maturing during the current year 2025, which amounts to approximately SAR 38bn, according to the Ministry’s statement.
The plan highlights key developments in public debt for 2024, initiatives related to local debt markets, and the funding plan and its guiding principles for 2025 pic.twitter.com/fG4j1rBBhT
— المركز الوطني لإدارة الدين – NDMC (@SaudiNDMC) January 5, 2025
In November 2024, the Budget Statement for FY 2025 expected a deficit of around SAR 101bn (2.3% of the GDP), which will continue at similar levels over the medium term due to the government’s spending policies that promote economic diversification and sustainable growth.
Meeting Funding Needs
In order to efficiently meet its funding needs, Saudi Arabia will continue to boost its access to various debt markets and expand the investor base through diversifying local and international financing channels. This includes issuing sovereign debt instruments at fair pricing, under well-defined and strong risk management frameworks.
Moreover, Saudi Arabia aims to capitalize on market opportunities through private transactions that can contribute to economic growth. These include export credit agency financing, infrastructure development project financing, and capital expenditure (CAPEX) financing. It will also continue exploring tapping into new markets and currencies based on market conditions.
FY 2025 Budget Statement
Saudi Arabia’s Budget Statement for FY 2025 underscores the Kingdom’s commitment to funding programs, initiatives, and economic transformation projects aligned with Saudi Vision 2030. It also prioritizes spending to maximize economic returns and gains. Furthermore, it aims to improve the quality of life through enhancing the quality of services provided to citizens and residents, in line with the objectives of Saudi Vision 2030.
To this end, the government focuses its spending on specific projects and strategies in targeted sectors, while maintaining spending on essential services for citizens and residents. Meanwhile, the FY 2025 Budget aims to maintain Saudi Arabia’s fiscal position and its ability to address global challenges.
According to the Budget Statement, the total revenues are projected to reach SAR 1,184bn in FY 2025, with expectations to hit SAR 1,289bn by 2027. Meanwhile, the total expenditures are expected to reach SAR 1,285bn in FY 2025, with government spending amounting to SAR 1,429bn by 2027.
These figures are driven by the Saudi government’s efforts to deliver Vision 2030’s objectives through implementing reforms.
