







According to the latest report on Thursday, Saudi Finance Minister Mohammed Al-Jadaan stated that the decline in oil revenues has provided the country with "an opportunity to review and reflect on past investment plans", but this will not affect their ambition to promote non-oil economic growth at all.
As background, international oil prices have fallen by more than 20% year-to-date, and Saudi Arabia is currently leading efforts to "tighten" OPEC+'s production cut discipline. The latest report indicates that OPEC+ may decide this weekend to continue increasing production at a rate of 411,000 barrels per day in July, as a penalty for member countries such as Kazakhstan and Iraq that have consistently exceeded production quotas.
In a recent interview, Al-Jadaan told the media that despite widening budget and current account deficits and rising debt levels, Saudi Arabia still plans to maintain its current pace of government spending to support its ambitious development plans. However, he also noted that the country will take advantage of the oil price decline and global uncertainty to evaluate the numerous ongoing diversification initiatives.
Al-Jadaan said, "We will not waste this crisis. While the world is perceived to be in crisis, the Saudi economy is performing exceptionally well. This is an opportunity to assess the current situation—if there is a chance to take bold action, we will act decisively. At the same time, the crisis provides an opportunity for review and reflection—are we rushing projects? Are there unintended consequences? Do we need delays? Do we need replanning? Do we need acceleration?"
The Saudi finance minister emphasized that the current priority is to avoid falling into the "boom and bust cycle trap" that has long plagued the country. Saudi Arabia's goal is not simply to balance its budget but to ensure, through institutional design, that spending supports economic growth. He also revealed that the Public Investment Fund, responsible for developing the country's large projects, is undergoing "similar, very cautious adjustments."
Data shows that Saudi Arabia's Q1 oil revenues fell by 18% year-on-year compared to 2024, while the fiscal deficit rose to $15.6 billion, the highest quarterly deficit since 2021. This also means that the Saudi Ministry of Finance will find it difficult to achieve its target of narrowing the budget deficit to 2.3% of GDP this year.
The IMF previously predicted that Saudi Arabia's budget deficit would expand to more than 4% of GDP in 2025 and 2026, while estimating that the oil price required for the country to achieve fiscal balance would need to reach $92 per barrel.
In response, Jadaan said, "As long as government spending can support non-oil economic growth, I won't be concerned about the fiscal deficit expanding to 3%, 4%, or even 'occasionally' 5% of GDP." It should be noted that Saudi Arabia's debt-to-GDP ratio stands at only 26%, placing it in a very healthy range globally.
Jadaan also emphasized that there is no plausible scenario under which Saudi Arabia's debt level would reach the 40% ceiling set by the Ministry of Finance.
The Saudi finance minister expects that, driven by non-oil activities, the country's GDP will grow by 4.6% this year, a significant increase from the 1.3% growth in 2024. Jadaan stated that what reassures the Saudi government is that many targets have been achieved or are on track to be met as planned. He said, "This gives us confidence, but we will not become complacent."
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