Saudi Arabia Q2 2025 Deficit Narrows Amid Rising Oil, Non-Oil Revenues

Saudi Arabia's budget deficit nearly halved in the second quarter of 2025 to approximately $9.2 billion due to a slight increase in oil revenues following OPEC+ production hikes, despite overall oil revenue falling 28-29% year-on-year. Total revenues for Q2 reached about $80.4 billion, with non-oil revenues rising sharply by around 7% to nearly $40 billion, making up nearly half of the government's income for the first time, reflecting progress in the Kingdom’s Vision 2030 economic diversification efforts. Public spending decreased by roughly 9% compared to the same quarter last year, demonstrating tighter fiscal controls, though spending still exceeded revenues, contributing to the deficit. Saudi Arabia’s public debt increased significantly, reaching approximately $371 billion in the first half of 2025 as the government continues to borrow to finance its Vision 2030 projects. Despite lower oil prices, GDP growth was supported by non-oil sectors, with the International Monetary Fund raising the 2025 growth forecast to 3.5%. Geopolitical tensions in the region have introduced risks that could affect foreign investment and tourism, though these events briefly boosted oil prices in mid-June.