The value of Saudi Arabia’s Vision 2030 real estate and infrastructure projects has seen a notable decline.
According to Knight Frank’s latest report, the current value of these projects is $1.3 trillion, reflecting a modest 4% increase from the previous year.
However, this year’s contracts have dropped to $164 billion, down 41% from last year’s $250 billion. This decline is due to growing concerns over the Saudi government’s funding shortages, which have led to delays in major projects.
In July, Bloomberg News reported that a government committee led by Crown Prince Mohammed bin Salman reviewed the large-scale projects, including NEOM. As a result, Saudi Arabia plans to reduce NEOM’s budget by 20% this year.
The Saudi government has been grappling with a budget deficit since the end of 2022, with an estimated shortfall of $21 billion this year. Last June, Saudi Arabia sold $11.2 billion worth of Aramco shares to support its ongoing projects.
Knight Frank highlighted that while many giga-projects are still far from completion, efforts are being made to overcome challenges related to supply chains, labor, and costs. Most projects are expected to be completed between 2028 and 2029, positioning Saudi Arabia as the largest construction market globally.
Vision 2030 is Saudi Arabia’s long-term development plan to move away from an oil-dependent economy. The plan aims to increase non-oil exports from 16% in 2016 to 50% by 2030 while also boosting healthcare, education, infrastructure, recreation, and tourism sectors.
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