A statement read on state-run television after a cabinet session said spending for 2015 is projected at 860 billion riyals ($229.3 billion) and revenues at 715 billion riyals ($190.7 billion).
Projected spending is slightly higher than the 855 billion riyals planned for this year, but revenues are 140 billion riyals lower than estimates for 2014.
The budget shortfall is the first deficit projected by the OPEC kingpin since 2011 and the largest ever for the kingdom.
The price of oil, which makes up more than 90 percent of public income in Saudi Arabia, has lost about half of its value since June due to a production glut, weak global demand and a stronger dollar.
Saudi Finance Minister Ibrahim al-Assaf said this month that Riyadh will continue massive public spending despite the sharp decline in oil prices.
Assaf said the budget comes during “challenging” global economic conditions but reserves built over many years have given Saudi Arabia “depth and a line of defence that come in handy in times of need”.