25.02.2026 14:53
Saudi Arabia, which is accelerating mega projects financed by oil revenues, reported a budget deficit of approximately $73.8 billion in 2025 due to rising costs and falling oil prices; the financing of Neom and other large investments has put pressure on the economy.
Saudi Arabia, one of the richest economies in the world due to its oil revenues, has signed off on massive building and mega-structure projects as part of its Vision 2030 plan, which aims to reduce the country's economic dependence on oil and focus on tourism and technology. However, these futuristic projects have led to a significant shock in the national budget due to costs being much higher than expected.
$73.8 BILLION BUDGET DEFICIT
The government's decision to redirect resources allocated for these massive investments to various infrastructure and technology investments during the economic recovery process after the coronavirus, combined with the decline in oil prices, resulted in Saudi Arabia closing the year 2025 with an approximate budget deficit of $73.8 billion. Particularly, the $25 billion deficit experienced in the last quarter of the year has created a notable break in the country's financial balance.
THE COST OF THE "SMART CITY" PROJECT WAS HEAVY
Futuristic structures such as the "smart city" Neom, the massive entertainment complex Qiddiya, and the planned 2-kilometer-high Rise Tower are among Saudi Arabia's most striking mega projects, making headlines not only for their architectural aspects but also for their financial dimensions. However, the decline in oil revenues has strained the budget allocated for these projects and has brought discussions about fiscal discipline back to the forefront in the country.
STATE REVENUES HAVE DECREASED SIGNIFICANTLY
The drop in the price of oil per barrel from $76 to $62 based on Brent has led to an annual decrease of approximately 20% in Saudi Arabia's state revenues; this situation has further complicated the financing of mega projects.
Experts emphasize the critical importance of maintaining Saudi Arabia's economic diversification strategy in the long term, while highlighting the need for cost control and prioritization in mega-scale projects. The delay of many planned projects or the need for budget revisions is considered another risk factor on the agenda.