The growth was mainly driven by a 26% annual increase in time and savings deposits, which reached SR838.53 billion.

Demand reserves also rose by 2.85% to SR1.25 trillion, while other quasi-money grew by 7.57% to SR352 billion.

Demand deposits, which make up 53% of the total, saw a slight decrease from 57% a year ago due to the popularity of term reserves with rising interest rates.

However, term deposits experienced a 3% monthly decline, the first in 18 months.

The text discusses the increase in popularity of term deposits in response to rising interest rates, which were aligned with US Fed rates as part of efforts to combat inflation.

However, the Fed's decision to maintain rates unchanged in March indicates that the upward trend may be coming to an end.

Saudi Arabia has successfully managed inflation through robust government policies, but its currency being pegged to the US dollar means its central bank closely follows the Fed's interest rate movements.

The segment of term deposits that grew the most during this period was from businesses and individuals, increasing by 36% to reach SR450 billion.

The text discusses the growth in bank deposits and government spending in Saudi Arabia.

Bank deposits saw an increase of 11.5 percent, reaching SR349.7 billion.

In contrast, government entities experienced a 16.4 percent rise, amounting to SR388.15 billion.

However, the growth in loans has surpassed the increase in deposits, putting pressure on the economy.

MEED Projects predicts that Saudi Arabia will require $640 billion for construction spending over the next five years.

To fund 60 percent of these projects, banks may need to raise nearly $384 billion.

While Saudi Arabia's reserves remain a significant funding source, about 15 percent may need to be sourced through debt.

This could result in the issuance of approximately $11.5 billion in new debt annually.

The text discusses the increasing construction needs in Saudi Arabia and the efforts of financial institutions to meet these needs through increased liquidity from deposits and the international debt market.

Debt issuance has already increased significantly, with $6.8 billion sold this year compared to $5.4 billion in the previous year.

Despite healthy balance sheets, financial institutions cannot carry the full financial burden of Vision 2030, Saudi Arabia's long-term economic development plan, as most projects are also funded by the central government and associated entities.

S&P Global Ratings categorizes most major lenders as investment grade with a stable outlook.

The Public Investment Fund of Saudi Arabia plans to invest $70 billion annually starting in 2026 and is exploring its own fundraising methods.

The financial market is showing signs of improvement, with borrowing costs in Saudi Arabia, as indicated by Saibor, easing back from a high of 6.4 percent in January.

However, Saibor remains above 6 percent due to high US interest rates, suggesting that banks may not yet enter the fixed-income market.