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Saudi Arabia cut its growth forecasts and raised its budget deficit estimates for the fiscal years 2024 to 2026, looking ahead to a period of higher spending and lower projected oil revenues.

Real gross domestic product is now expected to grow 0.8% this year, a dramatic drop from a previous estimate of 4.4%, according to the latest pre-budget report published by the Ministry of Finance on Monday. The GDP growth projection for 2025 has also been cut from a previous estimate of 5.7% to 4.6%; while the outlook for 2026 has been trimmed from 5.1% to 3.5%.

“The FY2025 budget highlights the Kingdom’s commitment to accelerate the regulatory and structural reforms, as well as the development of policies,” the pre-budget report read. “It also focuses on transformative spending to promote sustainable economic growth, improve social development, and enhance quality of life.”

The latest report further emphasized the Saudi government’s plans to deploy sovereign and development funds “for capital investment while empowering both the private and non-profit sectors to foster growth and prosperity.”

Saudi authorities also expect that the budget will remain in deficit for the next several years, as the kingdom prioritizes spending to achieve the targets of its Vision 2030 plan to modernize and diversify the heavily oil-dependent Saudi economy.

The Finance Ministry projected a wider budget shortfall of about 2.9% of GDP for 2024, compared with a previous projection of 1.9% for the year. It predicted deficits of 2.3% and 2.9% in 2025 and 2026, respectively, also wider than previous estimates.

Analyst discusses Saudi Arabia's $100-per-barrel oil price target

Saudi Arabia’s fiscal breakeven oil price — what it needs a barrel of crude to cost in order to balance its government budget — has increased in recent months and years and may well rise higher along with spending increases.

The IMF’s latest forecast released in April put that fiscal breakeven figure at $96.20 for 2024, marking a roughly 19% increase on the year before. The figure is also about 36% higher than the current price of a barrel of Brent crude, which was trading at around $70.70 as of Tuesday afternoon.

Oil prices are expected to remain subdued at least in the medium-term amid slowing demand and increased supply globally.

Saudi Arabia is hosting major international events that will require steep spending — like the World Cup 2034 and Expo 2030 — as well as building out multi-trillion dollar megaprojects like Neom, which is backed by the kingdom’s mammoth sovereign wealth fund, the Public Investment Fund.

Lower oil prices are the 'new normal'; price to range $70-$80/bbl: Kpler

“Saudi Arabia’s GDP dances to the rhythm of oil, and with recent data from the Ministry of Finance, it’s clear that as oil gushes, so does the economy,” Tarik Solomon, chairman emeritus at the American Chamber of Commerce in Saudi Arabia, told CNBC. “But when the wells slow, so does the growth.”

Saudi Arabia’s public debt has grown from around 3% of its GDP in the 2010s to roughly 28% today, according to the International Monetary Fund — a huge jump, but still low by international standards. Public debt in EU countries, for instance, averages 82%. In the U.S. in 2023, that figure was 123%.

Its relatively low debt level and high credit rating makes it easier for Saudi Arabia to take on more debt as it needs to. The kingdom has also rolled out a series of reforms to boost and de-risk foreign investment and diversify revenue streams. While the country’s economy has contracted for the last consecutive four quarters, non-oil economic activity grew 4.4% in the second quarter year-on-year, up 3.4% in the previous quarter.

Saudi Arabia's non-oil growth is proving to be 'robust,' economist says

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Europe’s wind power hits 20%, but 3 challenges stall progress

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Europe’s wind power hits 20%, but 3 challenges stall progress

Wind energy powered 20% of all electricity consumed in Europe (19% in the EU) in 2024, and the EU has set a goal to grow this share to 34% by 2030 and more than 50% by 2050.

To stay on track, the EU needs to install 30 GW of new wind farms annually, but it only managed 13 GW in 2024 – 11.4 GW onshore and 1.4 GW offshore. This is what’s holding the EU back from achieving its wind growth goals.

Three big problems holding Europe’s wind power back

Europe’s wind power growth is stalling for three key reasons:

Permitting delays. Many governments haven’t implemented the EU’s new permitting rules, making it harder for projects to move forward.

Grid connection bottlenecks. Over 500 GW(!) of potential wind capacity is stuck in grid connection queues.

Slow electrification. Europe’s economy isn’t electrifying fast enough to drive demand for more renewable energy.

Brussels-based trade association WindEurope CEO Giles Dickson summed it up: “The EU must urgently tackle all three problems. More wind means cheaper power, which means increased competitiveness.”

Permitting: Germany sets the standard

Permitting remains a massive roadblock, despite new EU rules aimed at streamlining the process. In fact, the situation worsened in 2024 in many countries. The bright spot? Germany. By embracing the EU’s permitting rules — with measures like binding deadlines and treating wind energy as a public interest priority — Germany approved a record 15 GW of new onshore wind in 2024. That’s seven times more than five years ago.

If other governments follow Germany’s lead, Europe could unlock the full potential of wind energy and bolster energy security.

Grid connections: a growing crisis

Access to the electricity grid is now the biggest obstacle to deploying wind energy. And it’s not just about long queues — Europe’s grid infrastructure isn’t expanding fast enough to keep up with demand. A glaring example is Germany’s 900-megawatt (MW) Borkum Riffgrund 3 offshore wind farm. The turbines are ready to go, but the grid connection won’t be in place until 2026.

This issue isn’t isolated. Governments need to accelerate grid expansion if they’re serious about meeting renewable energy targets.

Electrification: falling behind

Wind energy’s growth is also tied to how quickly Europe electrifies its economy. Right now, electricity accounts for just 23% of the EU’s total energy consumption. That needs to jump to 61% by 2050 to align with climate goals. However, electrification efforts in key sectors like transportation, heating, and industry are moving too slowly.

European Commission president Ursula von der Leyen has tasked Energy Commissioner Dan Jørgensen with crafting an Electrification Action Plan. That can’t come soon enough.

More wind farms awarded, but challenges persist

On a positive note, governments across Europe awarded a record 37 GW of new wind capacity (29 GW in the EU) in 2024. But without faster permitting, better grid connections, and increased electrification, these awards won’t translate into the clean energy-producing wind farms Europe desperately needs.

Investments and corporate interest

Investments in wind energy totaled €31 billion in 2024, financing 19 GW of new capacity. While onshore wind investments remained strong at €24 billion, offshore wind funding saw a dip. Final investment decisions for offshore projects remain challenging due to slow permitting and grid delays.

Corporate consumers continue to show strong interest in wind energy. Half of all electricity contracted under Power Purchase Agreements (PPAs) in 2024 was wind. Dedicated wind PPAs were 4 GW out of a total of 12 GW of renewable PPAs. 

Read more: Renewables could meet almost half of global electricity demand by 2030 – IEA


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Podcast: New Tesla Model Y unveil, Mazda 6e, Aptera solar car production-intent, more

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Podcast: New Tesla Model Y unveil, Mazda 6e, Aptera solar car production-intent, more

In the Electrek Podcast, we discuss the most popular news in the world of sustainable transport and energy. In this week’s episode, we discuss the official unveiling of the new Tesla Model Y, Mazda 6e, Aptera solar car production-intent, and more.

The show is live every Friday at 4 p.m. ET on Electrek’s YouTube channel.

As a reminder, we’ll have an accompanying post, like this one, on the site with an embedded link to the live stream. Head to the YouTube channel to get your questions and comments in.

After the show ends at around 5 p.m. ET, the video will be archived on YouTube and the audio on all your favorite podcast apps:

We now have a Patreon if you want to help us avoid more ads and invest more in our content. We have some awesome gifts for our Patreons and more coming.

Here are a few of the articles that we will discuss during the podcast:

Here’s the live stream for today’s episode starting at 4:00 p.m. ET (or the video after 5 p.m. ET):

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BYD’s new Han L EV just leaked in China and it’s a monster

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BYD's new Han L EV just leaked in China and it's a monster

The Chinese EV leader is launching a new flagship electric sedan. BYD’s new Han L EV leaked in China on Friday, revealing a potential Tesla Model S Plaid challenger.

What we know about the BYD Han L EV so far

We knew it was coming soon after BYD teased the Han L on social media a few days ago. Now, we are learning more about what to expect.

BYD’s new electric sedan appeared in China’s latest Ministry of Industry and Information Tech (MIIT) filing, a catalog of new vehicles that will soon be sold.

The filing revealed four versions, including two EV and two PHEV models. The Han L EV will be available in single- and dual-motor configurations. With a peak power of 580 kW (777 hp), the single-motor model packs more power than expected.

BYD’s dual-motor Han L gains an additional 230 kW (308 hp) front-mounted motor. As CnEVPost pointed out, the vehicle’s back has a “2.7S” badge, which suggests a 0 to 100 km/h (0 to 62 mph) sprint time of just 2.7 seconds.

BYD-Han-L-EV
BYD Han L EV (Source: China MIIT)

To put that into perspective, the Tesla Model S Plaid can accelerate from 0 to 100 km in 2.1 seconds. In China, the Model S Plaid starts at RBM 814,900, or over $110,000. Speaking of Tesla, the EV leader just unveiled its highly anticipated Model Y “Juniper” refresh in China on Thursday. It starts at RMB 263,500 ($36,000).

BYD already sells the Han EV in China, starting at around RMB 200,000. However, the single front motor, with a peak power of 180 kW, is much less potent than the “L” model. The Han EV can accelerate from 0 to 100 km/h in 7.9 seconds.

BYD-Han-L-EV
BYD Han L EV (Source: China MIIT)

At 5,050 mm long, 1,960 mm wide, and 1,505 mm tall with a wheelbase of 2,970 mm, BYD’s new Han L is roughly the size of the Model Y (4,970 mm long, 1,964 mm wide, 1,445 mm tall, wheelbase of 2,960 mm).

Other than that it will use a lithium iron phosphate (LFP) pack from BYD’s FinDreams unit, no other battery specs were revealed. Check back soon for the full rundown.

Source: CnEVPost, China MIIT

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