Saudi Arabia indicated it plans to continue a similar borrowing pace in 2025 to support its massive oil-diversification initiatives, Bloomberg reported. The kingdom was one of the top bond issuers in emerging markets last year, and its financial needs are slated to be 139 billion riyals ($37 billion), according to the National Debt Management Center.

The NDMC stated that a little over 100 billion riyals will be utilized to fund the budget shortfall, with the remainder going toward repaying maturing debt.

In addition to issuing bonds, the Saudi government is also expected to secure loans. Last Monday, it announced a $2.5 billion, three-year revolving credit arrangement with three banks: Abu Dhabi Islamic Bank, Credit Agricole SA, and Dubai Islamic Bank, according to Bloomberg data.

Bloomberg data indicate that the kingdom sold $17 billion in overseas bonds in 2024, placing it second only to Romania among developing markets. All of Saudi Arabia's bonds were denominated in dollars, but this year it has stated that it may consider other currencies to diversify its funding base.

Last year, Saudi Arabia's total bond funding, including agreements done by state-controlled organizations, such as the sovereign wealth fund, totaled around $50 billion.

Under Crown Prince Mohammed bin Salman's Vision 2030 goal to overhaul the world's largest crude oil exporter, the government is investing hundreds of billions of dollars in everything from new towns to sports and semiconductors.

Brent crude is selling at roughly $76 per barrel, less than Saudi Arabia's necessary level of more than $90 per barrel to balance its budget by 2025, according to the International Monetary Fund. Still, state producer Aramco raised oil prices for Asian importers next month, indicating that demand in its primary market is increasing.

The government anticipates a budget deficit of around 2.8% of GDP this year.

Despite its high expenditure demands, the Saudi government has a robust balance sheet and ample flexibility to incur further debt to fund its initiatives, according to Goldman Sachs Group Inc. In November, Moody's Investors Service raised the country's credit rating from A1 to Aa3, on pace with France and the United Kingdom, citing a strong outlook for the non-oil economy.