Saudi Arabia’s liquidity reached a historic high of SAR 3.03 trillion ($808 billion) by the end of February 2025, marking a 10.1% year-on-year increase, according to the Saudi Central Bank (SAMA). This growth in the broad money supply (M3) reflects a monthly rise of SAR 67.5 billion, or 2.3%, from January levels.
Demand deposits constituted the largest portion of M3 at 48.5% (SAR 1.47 trillion), followed by time and savings deposits at 34% (SAR 1.03 trillion). Quasi-cash deposits, including foreign currency holdings and repurchase agreements, accounted for 9.7% (SAR 293.7 billion), while currency in circulation outside banks made up 7.8% (SAR 237.9 billion).
This liquidity surge occurs as Saudi Arabia navigates fiscal challenges due to declining oil revenues. Brent crude prices have fallen below $65 per barrel, significantly under the estimated $90 per barrel needed to balance the kingdom’s budget. Consequently, the government anticipates a budget deficit of approximately $26 billion for 2025, the largest among emerging markets this year.
To address the shortfall, Saudi Arabia has increased its borrowing activities, raising $18.4 billion in debt so far this year. The Public Investment Fund (PIF) and its subsidiaries have also issued over $5 billion. Despite these measures, some Vision 2030 projects, such as the Neom city development, are experiencing delays and budget adjustments due to financial constraints.
