Even as the Esports World Cup is in full swing and the Kingdom announces its 12-year deal with the International Olympic Committee (IOC) to host the Olympic Esports Games, the Saudi Arabian government plans to cut billions of dollars in spending on some of its mega projects, and place other plans on hold, according to a new report from Bloomberg.
Crown Prince Mohammed Bin Salman (MBS) is leading a government committee that is working on what’s being described as “a sweeping review of mega projects,” with plans to cut billions of dollars out of current budgets from projects such as the mega-city NEOM, Qiddiya Coast (the unannounced tourism and entertainment project in Jeddah), and plans to launch a new airline in the area, according to the report.
Sources tell Bloomberg that these cuts are a reaction to a number of economic factors facing the Kingdom including lower-than-anticipated oil prices, a lack of investment from foreign entities (at least according to what was expected), and a predicted national budget deficit for the next three years.
This news isn’t particularly shocking, as the government said in December, after reviewing its ability to finance its commitments without hurting its credit rating, that it planned to accelerate some projects and put others on hold, with Riyadh taking priority over other projects such as NEOM.
While the Kingdom is scaling back some projects, it is still on track to spend $50B USD in 2024 to support its ongoing mega projects that are part of HRH Crown Prince MBS’ plan to transform the nation’s economy as part of its Vision 2030 plan. In addition, the Public Investment Fund, the Saudi government-run sovereign wealth fund, is expected to dole out around $70B in capital in 2025, according to the report.