Saudi Arabia is facing an increasing public debt crisis as a result of the country’s financial deficit, which is being fueled by the interest on annual financial installments, which is consuming the country’s revenue.
The odd thing is that, as Al-Bayt Al-Khaleeji Centre noted, MBS is continuing to increase his foreign borrowing while failing to consider how to address these crises.
The data and statistics provided by Al-Bayt Al-Khaleeji Center indicate that Saudi Arabia’s debts reached a total of 2023 equal to 2022 debts plus 2023 loans less 2023 debt service. Based on this, Saudi Arabia’s debts under MBS’s supervision in 2023 totaled 1,050.6 billion riyals, or the same as the debts in 2022, which amounted to 990.1 billion riyals, after deducting 128.7 billion riyals for debt service and adding 189.2 billion riyals in new loans.
It is noteworthy that official figures from the Saudi Ministry of Finance show that the Kingdom of Saudi Arabia’s debt grew at an annual rate of 80% between 2015 and 2023. The year 2023 also saw a noticeable increase in the payment of public debt, but this increase in loans did not result in a decrease in the total amount of MBS’s debt.
In addition, the Kingdom’s financial problems got worse when the amount of debt rose by 52.1 billion riyals in 2022 and 60.5 billion riyals in 2023.
Official projections for 2024 show that it will not be any better than previous years. Saudi Finance predicted that the public debt would amount to 1,115 billion riyals, an increase of 64.4 billion riyals. This means that the annual increase in debt will increase in value annually, and as a result, MBS’s state needs to create a new plan drafted by experts in economics and development rather than continuing with the unsuccessful plans he is currently implementing.
Notably, Saudi Vision 2030—which the Saudi Crown Prince drafted and sponsored—adopted a strategy of increasing borrowing beginning in 2016 in order to address the mounting financial strains on the Kingdom’s civil and military budget. As a result, the door was opened for external borrowing, with the external debt reaching 405.9 billion riyals by the end of 2023, or 38.6% of the total debt. The majority of the domestic debt (60.2%) came from loans that the MBS’s government made to commercial banks, which added to the burden of debt and had a detrimental effect on the Saudi economy. As a result, the Kingdom was taken off the list of nations with the lowest levels of debt in the world.
When it comes to the rate of Saudi Arabian public debt per capita (the total debt divided by the population), it started out at 4.5 thousand riyals and increased to 31.8 thousand riyals due to MBS’s misguided policies. This indicates that the public debt per capita in Saudi Arabia accounts for 25% of the country’s per capita income.
In summary, analysts have noted that while Saudi Arabia’s debt is not as hazardous as that of some other nations, like Egypt, Sudan, and Lebanon, it is nonetheless steadily rising as a result of the government’s poor policies.
