Saudi Arabia reviews 87 per cent of Vision 2030 is on track
Analysts say some projects might be scaled back or reorganized due to budget deficit.
Dubai: Saudi Arabia's top economic body reviewed the progress of the Saudi Vision 2030 plan this week, highlighting a recent government report that shows 87 per cent of its projects are "on the right track."
The Council of Economic and Development Affairs, chaired by the Crown Prince met this week signaling potential restructuring of the country's mega-projects to address financial challenges.
Analysts suggest that some projects might be scaled back or reorganized due to budget deficits, rising interest rates, and a lack of foreign investment, with officials hinting that some projects might extend beyond 2030.
James Swanston of Capital Economics in London commented that the meeting indicates Saudi Arabia's government and the Public Investment Fund (PIF), which owns the mega-projects, are "seriously reconsidering the state of Vision 2030 and the extent of their resource commitments."
Recently, PIF merged the entertainment company Seven with the Qiddiya mega-project, a sports and entertainment district outside Riyadh.
Neom, a futuristic city in northwest Saudi Arabia, announced that its horizontal city, The Line, will open in 2030 at less than 5 km long instead of the planned 170 km. Despite being valued at $925 billion (Dh3.3 trillion), PIF is responsible for funding $1.25 trillion (Dh4.5 trillion) worth of projects.
PIF and other entities have continued to access debt markets successfully. Last year, PIF raised $5.5 billion (Dh20 billion) through its latest green bond issuance, following $3.5 billion (Dh12.8 billion) raised in October 2022. sukuk, with a seven-year term, is anticipated this year.
The International Monetary Fund (IMF) increased its estimate for Saudi Arabia’s fiscal breakeven price to $96.2 (Dh353) per barrel of oil, up from $86 (Dh315)last year.