Saudi Budget Deficit Swells To Largest Since 2021

9 May 2025 Issue: 68 / 19 By: Jamie Ingram

Saudi oil revenues tumbled in Q1, even before oil prices felt the impact of US President Trump’s tariffs. With oil prices since dropping below the key $70/B barrier in April, another sharp decline is likely for Q2. The budgeted full year deficit of $26.9bn already looks highly optimistic.

Saudi Arabia may have to prepare for a much higher than expected budget deficit this year, with freshly-released data from the Ministry of Finance showing that a quarter of the way into the year the deficit is already more than half way to the expected full year figure of $26.9bn. Ominously, the figures relate to the period before oil prices dropped sharply in early April when US President Donald Trump unveiled his tariff plans (MEES, 4 April), with more economic pain likely on the way for Q2.

Overall, the Saudi economy remains in good health, growing by 2.7% in Q1 according to provisional government figures. The growth was driven by 4.2% gains in the non-oil sector while the oil-sector contracted by 1.4%. But it remains highly reliant on the oil and gas sector, which provided 56.8% of government revenues in Q1 despite dropping to a six-quarter low of $39.9bn (see table). (CONTINUED - 724 WORDS)