As it enters the final phase of its Vision 2030 economic transformation program, Saudi Arabia is increasingly likely to continue to scale back less viable megaprojects while focusing on successful reforms that have strengthened its diversification away from oil, though higher oil prices and improved regional security conditions could bring back an appetite for some of these aspirational projects. With the finish line for Vision 2030 just five years away, Saudi Arabia is paring back its ambitious vision for its economic transformation program. According to multiple recent media outlets, including The Wall Street Journal and Bloomberg, the kingdom has already begun to reduce its ambitions for the megacity Neom in northwestern Saudi Arabia, a project that once aimed to house millions but is increasingly likely only to accommodate a few thousand by 2030. Other projects, like building expansive resorts intended to contribute to making its Red Sea coastline a tourism destination, have either slowed or not even started. These disappointments aside, Saudi Arabia has also achieved notable breakthroughs in diversifying away from its oil sector. In 2023, according to Saudi statistics, nonoil revenue contributed 50% of the country's gross domestic product for the first time in the kingdom's history, driven by private sector investment, arts and entertainment, tourism, social services, health care, and education. In 2024, as oil activities declined 4.5%, nonoil GDP grew 4.3% to help keep Saudi GDP growing. Saudi women have also entered the workforce at increasingly higher rates as the country pushes its citizens out of government jobs and into the private sector, reaching 36% at the end of 2024, an all-time high.

• Vision 2030 incorporates both aspirational qualitative goals and quantitative measures to outline its economic transformation program. Saudi Arabia wants 50% of the country's GDP to come from nonoil revenue by 2030, increase the private sector's contribution to GDP to 65%, raise foreign direct investment's contribution to GDP to 25.7%, boost women's participation in the workforce to 30%, enhance public investment fund assets to $1.86 trillion, and rank the Saudi economy as the 15th largest in the world, among other objectives. After 2030, new long-term goals are likely. 
• Neom comprises multiple megaprojects, including The Line, a horizontal city meant to house up to 9 million people. Amid rising construction costs and concerns about the viability of achieving such a population by the 2030s, Bloomberg and The Wall Street Journal have reported that the project's scope has been significantly reduced to a more manageable length.
• Most of Saudi Arabia's economic transformation has been driven by its traditional economic centers — such as Riyadh, Jeddah, Mecca and Medina — Hajj tourism and Public Investment Funds investment into projects near these traditional business hubs.

Beyond megaprojects, Saudi Arabia has also faced challenges in reducing unemployment and attracting foreign investment. The kingdom aims to achieve a 7% unemployment rate for Saudi citizens by 2030, but has struggled to maintain rates below 8% for years. (The rate for Q3 2024 stood at 7.8% for nationals, the most recent data available). The problem persists partly due to high youth unemployment rates, as Saudi citizens often resist integration into the private sector, where work conditions can be more demanding and benefits less generous than those traditionally offered in the public sector. Education is another issue since Saudi students continue to underperform compared to their peers in developed countries on international assessments like the PISA exam, and Saudi employers complain about the lack of necessary skill sets among citizens for private sector roles. Meanwhile, foreign direct investment has been slow due to a mix of factors, from threats to the kingdom's security to concerns over the transparency of its courts and business environment, along with doubts about the viability of specific projects within Saudi Arabia. Consequently, the country's sovereign wealth fund, known as the Public Investment Fund, has become the primary investor in many of the kingdom's initiatives, especially the most ambitious ones.

• In a survey by the Serco Institute, a global think tank, more than 83% of employees in Saudi financial and insurance sectors were Saudi nationals; in other sectors, like manual labor professions, the proportion is much lower. The Institute also found that two-thirds of employed Saudis remain in the public sector, a number that has remained static for years. In 2011, only 600,000 Saudis worked in the nonoil private sector; today, according to Saudi statistics, 2.4 million work there. 
• Neom and other megaprojects have been funded almost entirely by the PIF, as outside investors remain skeptical after observing similar initiatives frozen or abandoned in the neighboring United Arab Emirates.

Further cuts to high-risk development projects are expected over the next five years and beyond, as Saudi Arabia continually reassesses the viability of megaprojects and the overarching goals of Vision 2030. Riyadh is likely to increasingly focus on its traditional economic centers for development rather than trying to create new centers of economic gravity. As uncertainties loom over the global economy, Saudi Arabia is expected to adopt a more conservative approach to its development strategy, focusing more on near-term viability than on aspirational projects. This strategy will likely involve additional cuts to megaprojects like Neom and the Red Sea resorts in favor of increased investments in established cities such as Dammam, Jeddah, Mecca, Medina and Riyadh. The Saudi government is likely to maintain its emphasis on tourism, technology, and finance to build a more robust economy, but may become more reluctant to support long-shot projects in sectors like mining without clear paths to profitability in the near term, particularly if the commodities market weakens amid global economic downturns. It seems unlikely that Saudi Arabia will significantly weaken its welfare state to push Saudis into the labor market at the necessary scale to meet Saudization goals in the near term considering concerns about potential domestic backlash, leaving Riyadh responsible for a growing public wage bill. But without substantial changes to the welfare state and significant structural transformations of the education system, Saudis will likely continue underperforming compared to Organization for Economic Cooperation and Development nations, limiting their ability to acquire the skills needed to fully transition the Saudi economy away from state spending oil revenues.

• Saudi Arabia's tech and financial sectors are largely concentrated in major cities like Riyadh and Jeddah, which have traditionally been the engines of the country's nonoil GDP growth and have large populations for employers to draw upon. Saudi Arabia has also begun requiring international companies to set up their headquarters in Riyadh if they wish to continue earning contracts from the Saudi government.
• Since the onset of Vision 2030, Saudi tourism has witnessed considerable growth, with 16 million visitors in the post-pandemic era of 2022 and an additional 27 million in 2023, a significant portion of whom are arriving as nonreligious tourists. Saudi Arabia has highlighted preexisting tourism attractions beyond the Hajj, including ancient ruins in its northwest, adventure tours, diving, and shopping and traditional recreation in its established cities.

Global macroeconomic conditions, especially oil prices, will likely influence further changes in Saudi spending patterns and willingness to invest in high-risk projects. In general, lower oil prices would be more likely to indicate further cutbacks to projects deemed unviable, while higher prices would be more likely to encourage the Saudi government to reengage with more aspirational projects. According to the U.S. Federal Reserve, Saudi Arabia's national budget has a break-even oil price of around $90. Though this break-even price does not dictate spending, it influences perceptions of the risk the state is willing to take in terms of investment. The notable spending cutbacks during the oil price crash of 2014 serve as a recent example. But oil prices may not be the only determining factor for Saudi appetite to take risks for Vision 2030, as potential global economic slowdowns could impact tourism and subsequently reduce the urgency to complete high-cost tourism projects. Other global geopolitical shocks that increase commodity prices could influence Saudi willingness to support risky projects, especially as construction prices could rise in their aftermath. Conversely, higher energy prices, a stronger global economy and the resolution of major geopolitical issues — such as the Gaza conflict, the U.S.-Iran tensions and the Russia-Ukraine war — might stabilize regional security conditions and global economic risks, thereby reigniting Riyadh's interest in pursuing more long-term and aspirational projects to capitalize on potentially stronger global economic conditions.

• The oil price crash from 2014 to 2016 prompted the United Arab Emirates, which the Saudis have used as a development model, to pause many long-term initiatives, such as its rail program, or scale them down, as with Masdar City. Other projects that were paused due to the global financial crisis in Dubai simply remained frozen. 
• Regional security conditions weigh on sentiment toward investments in Saudi Arabia, as Riyadh remains a potential target for the Houthis or Iran should the region experience full-scale escalation involving Israel, the United States and Iran. 
• Meanwhile, following the success of many core goals under Vision 2030, Crown Prince Mohammed bin Salman's political legitimacy is increasingly less tied to the completion of megaprojects that were part of the hype surrounding his rise to power in 2016. This offers the royal court greater flexibility to scale back projects deemed unviable without necessarily damaging public trust in the crown prince's capabilities.