In 2025, Saudi Arabia is witnessing an unprecedented financial phase. Domestic liquidity—measured by the broad money supply (M3)—has reached nearly 3 trillion Saudi riyals, marking a historic level according to the Saudi Central Bank (SAMA) and recent economic reports.
This figure not only reflects the strength of the financial system, but also highlights the enormous lending and investment capacity that the banking sector possesses to fuel growth.
However, the key question remains: will this abundant liquidity translate into productive investments that strengthen the real economy, or will it remain confined to deposits and short-term lending?
⸻
Between Liquidity Abundance and Credit Quality Pressures
The rise in liquidity stems from several interlinked factors—most notably high oil revenues, continued balanced government spending, and investor confidence in the Kingdom’s monetary policy.
Projects under Vision 2030 have also injected additional funds into the financial system.
At the same time, data shows that loan growth has outpaced deposit growth, with the loan-to-deposit ratio reaching around 106% in Q1 2025, according to Alvarez & Marsal.
This suggests that liquidity is indeed being deployed—but the real challenge lies not in the availability of money, but in how effectively it is channeled into innovative, value-creating projects rather than into consumer lending or real estate speculation.
⸻
The Role of Investment Institutions and Productive Sectors
Amid this cash abundance, the focus turns to how liquidity is being directed through major national institutions:
1.The Investment Power of the Public Investment Fund (PIF)
The PIF serves as the primary engine converting government liquidity into productive capital formation.
Its investments in giga-projects such as NEOM, as well as in tourism, renewable energy, and infrastructure, act as the key levers ensuring that a significant portion of liquidity becomes long-term productive assets that generate jobs and sustainable value.
2.Cautious Optimism Across Sectors
The real estate sector remains one of the main beneficiaries, with “Ejar”(regulates the real estate rental sector in Saudi Arabia) contracts rising 40% by September 2025—a positive sign of economic activity.
However, concentration of liquidity in a single sector risks over-dependence on real estate as a growth driver.
The economy needs better distribution of liquidity toward manufacturing, logistics, and advanced technology.
Notably, Saudi Aramco’s partnership with Nvidia to develop quantum computing applications signals a strategic shift toward a knowledge-based economy.
⸻
Monetary Policy as a Tool for Liquidity Efficiency
The Saudi Central Bank (SAMA) plays a crucial role in ensuring that liquidity supports both financial stability and sustainable growth.
With M3 exceeding 3 trillion riyals, innovative instruments are required to ensure that this liquidity translates into productive and sustainable financing.
Key approaches include:
•Targeted Financing Programs: Link subsidized financing for SMEs (through institutions like Kafalah) to measurable performance indicators such as employment and output, while simplifying access procedures.
•Green Finance Expansion: Channel capital toward renewable energy and smart infrastructure projects aligned with the Kingdom’s environmental goals.
•Regulatory Incentives for Banks: Offer advantages to banks that increase long-term productive financing over consumer lending, boosting value creation within the domestic economy.
According to the International Monetary Fund (IMF), Saudi banks are “well-capitalized and highly profitable,” yet the Fund warns that credit growth must remain directed toward productive sectors rather than quick-return activities.
⸻
From Abundance to Economic Efficiency
The goal is not to reduce liquidity, but to enhance its efficiency.
Abundant money supply is a strength—but it can become a burden if not effectively deployed.
The real economy is measured not by growing bank balances, but by the jobs, industrial output, and technological innovation generated from capital utilization.
This phase calls for a delicate balance between maintaining financial stability and stimulating productive investment.
If banks evolve from being mere financial intermediaries to development partners, then liquidity abundance will become a foundation for a comprehensive economic renaissance, not just a figure in statistics.
In conclusion, surpassing the 3 trillion riyal liquidity milestone underscores market confidence and sound fiscal management.
Yet, it also brings a national responsibility—to channel this financial strength toward real, value-creating development.
As the IMF projects Saudi growth to reach around 4% in 2025, maintaining momentum will require broadening the base of productive investment through closer integration among banks, private enterprises, and government development funds.
When the numbers in bank ledgers transform into factories running, labs innovating, and tech ventures led by Saudi talent, only then can it be said that liquidity has moved beyond being a statistic—becoming a true economic asset fueling sustainable national development.