Saudi borrowing aimed at funding growth, not tax hikes, finance minister says
As-salamu alaykum - Quick summary from Washington D.C.: Saudi Finance Minister Mohammed Al-Jadaan reiterated that the Kingdom borrows to finance strategic, productive projects rather than raising taxes or cutting public spending.
Speaking at an Atlantic Council event during the 2025 IMF-WB meetings, he said borrowing is being used to back programs that create jobs and attract investment - especially in tourism, industry, tech and logistics.
He pointed out that non-oil activity grew about 4.8% in the first half of 2025 and now makes up more than half of GDP. With that kind of non-oil expansion, borrowing at lower costs can be a sensible choice, he argued, turning debt into long-term value for current and future generations, Insha'Allah.
The minister also stressed that there’s no plan to raise the tax burden. Instead, the aim is to grow the economy so revenues rise naturally as the pie gets bigger.
Al-Jadaan noted Saudi’s debt-to-GDP ratio remains among the lowest in the G20 and said there’s no chance it will head toward 50% thanks to disciplined fiscal policy.
He tied spending decisions to Crown Prince Mohammed bin Salman’s directive that public interest must be the yardstick for projects. If something no longer makes sense, they won’t be proud - they’ll change, pause, or stop it.
Contrary to talk about cuts, he said spending continues strongly on tourism, industry, technology and AI, and some logistics projects have been sped up to support faster growth in tourism and manufacturing.
He also mentioned the Public Investment Fund has finished a big portfolio review and will share an updated strategy soon.
Al-Jadaan called the current budget shortfall an intentional choice to invest in diversifying the economy, and reminded listeners that borrowing aimed at infrastructure, connectivity and human capital becomes lasting wealth rather than a burden.
Overall, the message was clear: prudent borrowing to drive productive investment is the chosen path to sustainable growth.
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