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ºÚÁÏÉçÇø’s Ministry of Finance has released the fiscal results for Q2 and the first half of 2025. Total revenues stood at SR302 billion ($80.5 billion) in Q2, marking a 15 percent decline from SR354 billion in the same period of 2024.

The drop is mainly due to reduced oil revenues from lower prices and a one-time collection of performance-related profits last year.

Non-oil revenues reached SR150 billion, a 7 percent increase from SR141 billion in Q2 2024. Total expenditure was SR336 billion, down 9 percent from SR369 billion last year.

As a result, the budget deficit widened to SR35 billion, compared to SR15 billion in Q2 2024. However, the Q2 2025 deficit shrank by SR24 billion from Q1 2025, largely due to higher non-oil revenues.

In the first half of 2025, total revenues reached about SR565 billion, down 13 percent from SR647 billion in the same period last year. This decline was mainly due to lower oil prices and a non-recurring collection of performance-related profits in H1 2024.

Non-oil revenues during the first half of 2025 totaled about SR264 billion, a 5 percent increase from SR252 billion during the same period last year.

Total expenditures in the first half of 2025 amounted to about SR658 billion, a 2 percent decrease compared to the same period last year.

Real gross domestic product grew by 3.4 percent in Q1 2025 compared to the same period last year, driven by a 4.9 percent increase in non-oil activities and a 3.2 percent rise in government activities.

In conclusion, despite oil revenues declining by 29 percent in Q2 and 24 percent in the first half of 2025 — resulting in a fiscal deficit in both periods — the Saudi government remains committed to the economic and fiscal transformation outlined in Vision 2030.

The growth in non-oil revenues during Q2 and the first half of 2025 reflects the success of the government’s reform efforts to diversify the Kingdom’s income sources in line with Vision 2030. This increase has helped to offset lower oil revenues, stabilizing overall revenue performance.

The government reaffirms its commitment to fiscal sustainability over the medium and long term. These efforts are vital to strengthening the Kingdom’s economic resilience amid evolving global challenges.

The fiscal results show the government’s adoption of a counter-cyclical fiscal policy aimed at stabilizing the economy rather than amplifying fluctuations.

Consumer spending grew about 9.1 percent in the first two months of Q2 (April and May), reaching about SR304.4 billion, reflecting strong consumer confidence in the economy.

The e-commerce index grew by about 63.1 percent, reflecting significant advancement in electronic transactions, supported by the government’s drive to expand electronic payments and promote digital transformation.

Money supply (M3) grew about 9.4 percent year-on-year in May 2025, reaching SR3.091 trillion, reflecting continued expansion across various economic activities.

The budget deficit is not a concern given the strong fiscal position, as the government pursues an expansionary fiscal policy, accelerates projects with economic and social returns, and strives to achieve the ambitious goals of Vision 2030.

Economic and financial reforms have helped to mitigate the impact of declining oil activity through income diversification, improvements to the business environment, and support for growth across promising sectors.

These reforms will further diversify the economic base, sustain growth, advance infrastructure development, and enhance public services to improve citizens’ quality of life.

• Talat Zaki Hafiz is an economist and financial analyst. X: @TalatHafiz

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