Saudi Arabia prepared to cancel megaprojects if needed: finance minister

 

Saudi Arabia can make adjustments in megaprojects on need basis: finance minister 

Saudi Arabia is prepared to cancel or scale back even its most high-profile megaprojects if needed, Finance Minister Mohammed al-Jadaan said on Wednesday, marking the government’s clearest acknowledgment yet that parts of Vision 2030 are being reassessed.

“We have no ego, absolutely no ego,” Jadaan said at a post-budget briefing in Riyadh, according to Bloomberg. “If we announce something and we need to adjust it, accelerate it, make it a priority over others — or defer or cancel it — we will, without blinking.”

His remarks come as multiple reports suggest the kingdom is recalibrating some of its most ambitious developments, including Neom — the multibillion-dollar Red Sea mega-project featuring luxury coastal tourism, the Trojena ski resort, an industrial hub, and The Line, a planned 170km linear city.

In November, The Financial Times reported that architects and developers had begun drastically downsizing The Line, the centrepiece of Neom and a signature initiative of Crown Prince Mohammed bin Salman. A separate FT report earlier this year said construction at Trojena was falling behind schedule, prompting internal discussions about potentially seeking an alternative host for the 2029 Asian Winter Games.

 

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While these projects drew global attention for their futuristic scale, they represent only part of the crown prince’s broader push to diversify the economy away from oil. Officials say the kingdom is doubling down on sectors where it holds natural advantages, such as AI — supported by abundant cheap energy — and tourism, anchored by Mecca and Medina.

The government also continues to advance large-scale religious tourism projects, including a major expansion around the Grand Mosque in Mecca involving new towers for worship, accommodation and hospitality.

“Spending efficiency doesn’t mean cutting spending,” Jadaan said. “It means decreasing spending on some items to increase on others.”

Saudi Arabia is also looking to attract more Western visitors. Last month, reports from foreign residents indicated further easing of restrictions on alcohol purchases at the kingdom’s lone licensed liquor store.

Budget outlook

Jadaan’s comments came as the government released its 2026 budget forecast, projecting the deficit will narrow to 3.3 percent of GDP from 5.3 percent in 2025.

 

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A budget deficit reflects the gap between government spending and revenue. While running large deficits can strain public finances, Saudi Arabia benefits from a relatively low debt-to-GDP ratio of around 30 percent and vast proven oil reserves — factors that bolster investor confidence and make international borrowing easier.

“This is a deficit by design,” Jadaan said, noting that the government intends to maintain a fiscal shortfall through 2028 as part of its economic strategy. “Our level of spending in the last three budget cycles has been consistent, but now it is about what we are spending on, rather than how much we are spending.”

Source: https://www.middleeasteye.net/