Pre-budget focuses on economic growth, service improvements 
Saudi Arabia’s pre-budget statement for 2025, recently released by the Ministry of Finance, revealed that the Saudi economy has showcased remarkable development, while continuing to shift toward diversification and enhancing the growth of non-oil activities.
The Kingdom’s real gross domestic product is expected to grow by 0.8 percent in 2024, supported by the growth of non-oil activities, which are projected to rise by 3.7 percent, reinforced by several positive economic indicators observed in the first half of this year.
Among these indicators is private consumption, which rose by 2.4 percent in the first half of this year.
Additionally, the enhancement of privatization, improvement of the work environment, and the empowerment of women and youth have contributed to the growth of real GDP, in line with Saudi Vision 2030 strategies and projects.
It is worth noting that private consumption growth was driven by the contributions of wholesale and retail trade, restaurants and hotels, and the facilitation of visa procedures for visitors to the Kingdom.
Despite the rapid growth of the Kingdom’s economy, the average consumer price index has recorded moderate increases, reaching 1.6 percent from the beginning of this year until August 2024 compared to the same period last year. Preliminary expectations indicate that the CPI for the full year 2024 will reach 1.7 percent.
The positive performance of non-oil activities has also impacted the labor market, as evidenced by data released by the General Authority for Statistics, which showed that the overall unemployment rate decreased to 3.3 percent in Q2 2024 compared to 4.1 percent in the same period last year.
Additionally, the unemployment rate among Saudis has declined to its lowest level, reaching 7.1 percent in the second quarter of 2024 compared to 8.5 percent in the second quarter of 2023, nearing the Saudi Vision 2030 target of 7 percent.
Despite the budget deficit, the Saudi government remains committed to enhancing the sustainability of public finances and achieving comprehensive development goals.
On the other hand, women’s participation rates in the labor market reached 35.4 percent in Q2 2024, compared to 19.3 percent in Q4 2016, surpassing the Saudi Vision 2030 target of 30 percent and approaching the new target of 40 percent.
Real GDP is expected to grow by 4.6 percent in 2025, driven primarily by the growth of non-oil activities, reflecting the Kingdom’s commitment to implementing its ambitious strategies and achieving sustainable development.
The Public Investment Fund continues to enhance Saudi Arabia’s revenues through its domestic, regional, and international investments.
The PIF’s strategy has focused on maximizing its assets, launching new and promising strategic sectors in Saudi Arabia, localizing technologies, transferring knowledge, empowering the private sector, and establishing strategic economic partnerships at local, regional, and international levels.
The PIF has achieved a significant increase in its assets under management, which amounted to SR3.47 trillion ($924 billion) in August 2024, up 21 percent from SR2.87 trillion at the end of 2023.
The PIF has created more than 1.1 million direct and indirect job opportunities locally and globally, in addition to establishing 95 local companies across several sectors of the economy.
It is worth mentioning that while the global economy is expected to grow by 3.3 percent in 2025, the Saudi economy is projected to grow by 4.7 percent.
Preliminary estimates indicate that total revenues will amount to SR1,184 billion, while total expenditures are expected to reach SR1,285 billion in 2025, resulting in a deficit of SR101 billion, representing 2.3 percent of GDP.
Despite the budget deficit, the Saudi government remains committed to enhancing the sustainability of public finances and achieving comprehensive development goals.
The government is also determined to continue spending on essential services for citizens and residents and improving quality of life in line with the Quality of Life Program, one of the initiatives under Saudi Vision 2030.
• Talat Zaki Hafiz is an economist and financial analyst. X: @TalatHafiz
