Prime Highlights:

Saudi Arabia’s finance minister, Mohammed Al-Jadaan, has accepted the fiscal borrowing plan for the year 2025 at SR139 billion or $37 billion.

The budget will meet two major financial needs, funding the fiscal gap amounting to SR101 billion and clearing matured liabilities of SR38 billion.

Key Background:

The Minister of Finance, Mohammed Al-Jadaan, has approved the annual borrowing plan for the Kingdom for 2025. It is a comprehensive plan for funding the needs of the country and has been approved by the board of directors at the National Debt Management Center. It outlines the main developments in public debt management as well as initiatives that will strengthen local debt markets.

The ministry in its official budget unveiled today says that the overall amount of SR139 billion, or around $37 billion for this year, will be targeted with its funding plan that will try to achieve two interlinked targets, coverage of SR101 billion as a fiscal deficit and debt servicing worth SR38 billion that need to be paid back in 2025.

The Saudi government will attempt to meet these financial needs by exploiting both local and international financing avenues. The strategy will involve a set of strategic initiatives aimed at boosting economic growth through innovative financing. The measures will range from export credit agency-backed projects to infrastructure funding and capital expenditure projects.

Besides that, the Kingdom would focus on developing the local debt market by issuance of sukuks regularly in Saudi Riyal, such kind of detailed schedule will be included within the funding scheme for year 2025. Further expansion in the spectrum of Saudi Debt, the Kingdom would focus on the pursuit of international debt and release it in some international currency, if conditions are favorable, respectively.

Therefore, this strategic road map represents a commitment on the part of the Kingdom to the effective management of public debt while continuing, at the same time, to foster economic development through diversified funding sources. It also represents a giant step for Saudi Arabia in its relentless efforts to build up its financial infrastructure and strengthen its position in global debt markets.