Saudi Arabia Adjusts Vision 2030, Fiscal Reality Bites

Global oil prices dropped by about USD 10 for both US West Texas Intermediate crude and Brent due to a surprise OPEC+ supply increase in April 2025 and reduced IEA demand projections for 2025 and 2026. Goldman Sachs projects Brent averages USD 63 for the rest of 2025, significantly below the IMF's required USD 90+ for budget balance.

Fitch Ratings projects Saudi Arabia's fiscal deficit increases to 4.1% of GDP in 2025, up from a previous projection, due to lower oil prices and a reduced dividend payout from Saudi Arabian Oil Company (Aramco) of roughly USD 85 billion in 2025, down from USD 124 billion in 2024. Edward Bell of Emirates NBD confirms the widening deficit.

The Public Investment Fund scales back or recalculates ambitious megaprojects like NEOM, with timelines for other projects, such as those for the 2029 Asia Winter Games, 2034 FIFA World Cup, and Expo 2030, prioritized. Saudi Arabia plans to raise USD 37 billion in 2025 from debt markets, leveraging its low public debt of 30% of GDP in 2024, projected to rise to 35% in 2025, and its improved Moody’s sovereign rating of Aa3.

The monarchy already raised USD 14.1 billion from Eurobond issuances in 2025. The government also explores new revenue streams, including cuts to capital spending and new taxes like property or personal income taxes, as suggested by James Swanston of Capital Economics and Paul Gamble of Fitch Ratings.