The Kingdom of Saudi Arabia estimates its financing needs at approximately $22.93 billion (86 billion riyals) in 2024 according to the borrowing plan approved by Finance Minister Mohammed Al-Jadaan, as announced by the National Debt Management Center (NDMC) on Thursday.
Fiscal Deficit and Economic Growth
The Kingdom, the world’s largest oil exporter, forecasts a fiscal deficit of 79 billion riyals in 2024, slightly smaller than the 82 billion riyals deficit expected last year due to a decline in crude oil production and global prices that have reduced revenues.
Borrowing Plan
NDMC states that the borrowing plan is expected to finance the fiscal deficit and repay due debts in the future, in addition to seizing market opportunities as part of the country’s risk management strategy.
Public Debt and Reliance on Hydrocarbon Revenues
Public debt is expected to reach 1.115 trillion riyals by the end of 2024, which is about 26 percent of GDP, according to previous government announcements. Saudi Arabia continues to rely on hydrocarbon revenues to bolster its public finances.
Diversifying the Saudi Economy
Saudi Arabia has made significant spending on initiatives to diversify its economy away from oil and gas, as strong domestic demand boosts growth and momentum in non-oil activities last year, which outpace overall growth. However, the Kingdom remains dependent on hydrocarbon revenues to enhance public finances.
Saudi Arabia’s Borrowing
Saudi Arabia borrowed $10 billion from debt markets through the issuance of a three-part bond in January 2023, followed by the issuance of $6 billion in Islamic bonds in May.
In summary, Saudi Arabia estimates its financing needs for 2024 at $22.93 billion, and plans to use this funding to cover the fiscal deficit, repay due debts, and implement development and infrastructure projects that foster economic growth and achieve the Kingdom’s Vision 2030.
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