RIYADH: Saudi Arabia’s non-oil revenues climbed 6.6% year on year in the second quarter of 2025, reaching SR149.86 billion ($39.96 billion), according to the Ministry of Finance’s quarterly budget report.
This marks a fiscal milestone, with non-oil income now accounting for 49.7% of total government revenues, up from less than 40% a year ago.
Oil revenues fall, diversification gains momentum
Oil income fell 28.76% to SR151.73 billion from SR213 billion a year earlier, pulling total government revenues down 15% to SR301.6 billion.
The decline reflects voluntary oil production cuts under OPEC+ agreements in late 2023 to stabilize prices. These cuts—initially 1 million barrels per day—were gradually unwound in 2025, with output increases of 138,000 bpd in April and 411,000 bpd in both May and June. Production is set to return to pre-cut levels by September, earlier than planned.
Main drivers of non-oil revenue growth
The largest share of non-oil income came from taxes on goods and services at SR74.95 billion (50% of total), followed by “other revenues” at SR28.9 billion (19.26%), which includes earnings from government entities, port fees, advertising, and fines.
Other key contributors:
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Corporate zakat & other taxes: SR26 billion
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Income, profit, and capital gains taxes: SR13.73 billion
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Taxes on international trade & transactions: SR6.32 billion
The growth mirrors robust performance in non-hydrocarbon sectors. In Q1 2025, Saudi GDP grew 3.4% year on year, driven by a 4.9% rise in non-oil activities. Top-performing sectors included wholesale & retail trade (+8.4%), transport & communications (+6%), and finance & business services (+5.5%).
Spending, deficit, and debt profile
Government spending fell 8.9% in Q2 to SR336.13 billion, led by:
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Employee compensation: SR140.4 billion (41.77% of total)
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Goods & services: SR73.58 billion (22%)
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Capital expenditure: SR39.9 billion (down nearly 39% year on year)
The quarter closed with a budget deficit of SR34.53 billion, down 41% from Q1 but up 125% from a year earlier, funded entirely through borrowing. Public debt reached SR1.39 trillion, up 14.1% annually, with 62.84% domestic and 37.16% external.
Outlook: Non-oil economy to stay strong in 2025
With non-oil revenues nearly matching oil income, Saudi Arabia’s fiscal position is becoming more resilient to oil price swings. The IMF projects 3.4% non-oil GDP growth in 2025, supported by Vision 2030 projects, strong domestic demand, and credit growth.
Oil output is expected to hit 9.5 million bpd in July and rise thereafter. The fiscal deficit is forecast to peak at 4% of GDP in 2025 before narrowing to 3.2% by 2030, with public debt-to-GDP remaining moderate at 40.6%.
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