Saudi Arabia's Debt Surges Record $30 Billion Amid Budget Deficit

Saudi Arabia experienced a record jump in debt levels in the first quarter of 2025, with net indebtedness rising by about $30 billion due to increased borrowing in private and international markets. This surge in borrowing coincided with a sharp fall in oil revenues, leading to the kingdom's budget deficit nearly quadrupling compared to the previous year, reaching its highest level since 2021. Government spending remained high, particularly on projects like Neom and defense, while oil revenues dropped 18% year-on-year. Despite the rising debt, which now stands at approximately 30% of GDP, Saudi officials assert the country can manage a prolonged period of low oil prices, and the government has significant public assets it could sell if needed. The kingdom chose to fund the deficit through borrowing rather than drawing down foreign reserves. The International Monetary Fund projects that Saudi Arabia’s gross debt could rise to 44.5% of GDP by 2029, with budget deficits expected to remain elevated in the coming years.