The 2025 borrowing framework, as outlined in the plan, includes a specific timeline for issuing Saudi riyal-denominated sukuk, aiming to expand the country’s capital base while ensuring a balanced approach to national debt management. The detailed plan marks a significant step in securing the funding necessary to support the Kingdom's ambitious Vision 2030 economic transformation, which seeks to diversify the economy and reduce dependence on oil revenues.
The plan also highlights the developments in public debt observed throughout 2024, providing a strategic overview of the government’s financing activities, such as managing debt maturity schedules and the integration of new debt instruments. The goal is to make debt management more effective, reduce borrowing costs, and improve financial stability, which will contribute to the Kingdom’s long-term economic health.
As part of the plan, the Saudi government is working to enhance the domestic debt market. Strengthening the market is seen as a critical element for promoting local investment, diversifying financing sources, and facilitating greater access to capital for the public and private sectors. This initiative is in line with broader efforts to establish Saudi Arabia as a regional financial hub, leveraging its growing capital markets to support economic development and attract foreign investment.
In addition to enhancing local debt markets, the plan sets forth specific measures aimed at maintaining a prudent approach to fiscal policy. These measures include detailed debt issuance forecasts and a comprehensive risk management strategy, designed to mitigate market volatility and interest rate fluctuations that could affect the Kingdom’s borrowing costs.
The approval of this borrowing plan comes as part of Saudi Arabia's ongoing efforts to manage its fiscal policy effectively amidst global economic uncertainties. The Ministry of Finance, along with the National Debt Management Center, has continuously adapted its strategy to address challenges posed by fluctuations in oil prices, global financial markets, and shifts in investor sentiment.
Saudi Arabia’s national debt, which is primarily composed of bonds and sukuk, has steadily increased in recent years to fund the government’s ambitious projects under Vision 2030. The approval of the 2025 borrowing plan signals continued commitment to fiscal discipline, with an emphasis on sustainable debt levels and ensuring that borrowing remains manageable in the long term.
As part of its overall fiscal strategy, the Kingdom has consistently worked to increase its foreign reserves and diversify income sources to reduce reliance on oil exports. The borrowing plan for 2025 is expected to play a key role in achieving these goals, balancing debt management with economic growth objectives.
The Saudi government has also focused on increasing transparency in its debt issuance processes, providing clearer guidelines and communication to investors. This level of transparency is crucial in fostering confidence among international and domestic investors, ensuring the continued success of debt issuances, and maintaining the Kingdom's strong credit ratings.
Looking ahead, the government’s ongoing reforms and investment in non-oil sectors are likely to reduce its fiscal dependency on oil, further reducing the burden on public debt. The Kingdom's Vision 2030 plan, which includes large-scale initiatives in sectors such as tourism, entertainment, and technology, is expected to generate substantial non-oil revenue streams in the coming years.