Saudi Arabia Posts Stronger Economic Growth in 2025 Despite Widening Fiscal Deficit

Saudi Arabia Posts Stronger Economic Growth in 2025 Despite Widening Fiscal Deficit

Saudi Arabia’s economy is on track to grow faster in 2025, according to official estimates, even as the Kingdom reports a larger-than-expected fiscal deficit. The rebound is driven by a resurgence in non-oil sectors, strong public investment, and continued momentum under the ambitious Vision 2030 economic transformation agenda.

Preliminary government data shows that GDP is expected to expand by 4.2% in 2025, up from 2.3% in 2024. Much of the growth is being fueled by diversification efforts, including advancements in tourism, logistics, real estate, and AI-driven infrastructure projects. 

However, the positive economic outlook comes alongside a wider fiscal shortfall, as government spending on giga-projects and social programs continues to outpace revenues. The deficit is forecast to reach 4.8% of GDP, up from 3.1% in 2024. Authorities have reaffirmed that this is a strategic investment phase, aimed at building long-term resilience and reducing dependence on oil.

Despite the short-term fiscal gap, international investors remain optimistic. Credit agencies maintain Saudi Arabia’s investment-grade rating, citing solid reserves, prudent debt levels, and long-term growth potential anchored in Vision 2030.

As the Kingdom balances aggressive development with fiscal prudence, 2025 could prove to be a pivotal year in reshaping the region’s largest economy.