The surge in expenditures is primarily attributed to accelerated spending on social and developmental projects, aligning with the Kingdom's Vision 2030 objectives to diversify the economy away from oil dependence. This strategic expansion aims to enhance economic growth and improve public services. Notably, spending on the development of economic resources increased by 8%, reaching SAR 18.68 billion compared to the same quarter in 2023. Public administration expenditures also saw a significant rise of 39%, totaling SAR 16.52 billion.
Despite the increase in revenues, the budget deficit widened due to the higher expenditure levels. The government plans to continue its borrowing activities to meet the estimated financing needs for 2024. By the end of the year, public debt is expected to reach approximately SAR 1.172 trillion, representing 28.6% of GDP. This is an increase from SAR 1.103 trillion at the end of 2023.
In terms of economic performance, the Kingdom recorded a real GDP growth of 0.8% in 2024, supported by a 3.7% growth in non-oil activities. This reflects the ongoing efforts to diversify the economy and reduce reliance on oil revenues. However, the International Monetary Fund has noted that Saudi Arabia would need oil prices to be nearly $100 per barrel to balance its budget, highlighting the challenges faced amidst fluctuating oil markets.
Looking ahead, the 2025 budget statement estimates total expenditures of SAR 1.285 trillion and revenues of SAR 1.184 trillion, projecting a deficit of SAR 101 billion, approximately 2.3% of GDP. The government remains committed to its Vision 2030 goals, focusing on strategic investments to drive economic diversification and sustainable growth.
While the ambitious projects under Vision 2030, such as the Neom megacity, are central to the Kingdom's diversification plans, they also present financial challenges. The Neom project, envisioned as a futuristic city, has faced budget overruns and delays. Finance Minister Mohammed Al-Jadaan has described Neom as a "50-plus-year plan," indicating that returns are anticipated in the distant future. This long-term horizon underscores the complexity of balancing immediate fiscal responsibilities with expansive developmental ambitions.