Saudi Arabia’s ambitious project Neom, estimated to cost around $1.5 trillion, is anticipated to house 9 million people between two 106-mile-long glass skyscrapers more than 1,600 feet high. According to Crown Prince Mohammed bin Salman, the project will bring millions of new residents to the country and will also revolutionise the country’s technology and living standards. He further mentioned that the project is a key component of Vision 2030. It focuses on diversifying Saudi Arabia’s economy beyond oil revenues while fostering job creation and developing new industries to support its growing young population.
Growing Debt
The ambitious Neom project and Saudi Arabia’s investment spree raise the question of whether Saudi Arabia can continue funding it.
In October, Saudi Arabia lowered its growth estimates and raised its debt estimates for the fiscal year 2024-2026. The Ministry of Finance projects the GDP growth to be around 0.8%, which is significantly lower than the previous estimates of 4.4%.
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According to CNBC, the kingdom’s economy has experienced a significant shift. After recording a budget surplus of $27.68 billion in 2022, it transitioned to a $21.6 billion deficit in 2023 due to rising expenditures and declining oil revenues. For 2024, the government projects a deficit of $21.1 billion, with expected revenues of $312.5 billion and expenditures of $333.5 billion.
