Saudi Arabia funds budget gap with $2.5bn loan

Saudi Arabia has secured a sharia-compliant revolving credit facility of $2.5 billion to fund its budget gap in 2025.

The credit facility for three years was secured from three regional and international financial institutions, according to the National Debt Management Center (NDMC).

It falls within the kingdom’s medium-term public debt strategy by diversifying funding sources in line with the annual borrowing plan.

In November 2024, Saudi Arabia approved its 2025 state budget, which estimates total revenues at SAR1.18 trillion ($314 billion) and expenditures at SAR1.28 trillion.

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This resulted in a fiscal deficit of SAR101 billion ($26.9 billion).

The finance ministry said that would represent 2.3 percent of gross domestic product, which is lower than the 3 percent of GDP in a recently revised estimate for 2024. 

Experts told AGBI this month that the $27 billion budget deficit is likely to widen by the end of the year.

“I expect Saudi Arabia to overshoot spending in 2025 as it has done in previous years because it needs to fund growing development requirements in its Vision 2030 [plan],” said Saad Thaqfan, a member of the Saudi Economic Association.