Saudi Arabia is working to shift its economy away from oil through its Vision 2030 initiative. A key part of this plan is the Neom project, which is being described as a “very long-term program” by the kingdom’s finance minister.
Finance Minister Mohammed Al Aljaadan emphasized that Neom is a 50-plus-year venture. He cautioned that expecting immediate financial returns from Neom’s grand-scale developments is unrealistic. Some projects may yield short to medium-term benefits, but the overall vision is long-term.
Neom, located in northern Saudi Arabia, is central to the country’s Vision 2030, aiming to diversify the economy. However, parts of Neom, like The Line, have seen adjustments due to fluctuating oil revenues and other challenges.
Recently, Neom’s CEO resigned unexpectedly after six years, with no reasons provided for the departure.
Saudi Arabia predicts a $26.8 billion budget deficit for 2025, equating to 2.3% of GDP. Despite this, Aljaadan insists that the kingdom’s financial health remains robust and development plans are on track.
For 2025, Saudi Arabia forecasts total expenditure of 1.285 trillion riyals ($342 billion) and revenue of 1.184 trillion riyals ($315 billion).
The country’s economic transformation strategy, which includes significant investment in tourism, entertainment, and infrastructure, has attracted global interest. However, the Saudi economy has faced contractions due to these changes and declining global oil prices.
In 2022, Saudi Arabia was the fastest-growing G20 economy, but its GDP shrank in 2023. The government predicts 0.8% growth this year, with a strong uptick expected in 2025 as non-oil sectors expand.