Saudi Arabia will focus on pragmatic investments in projects in the final stretch of Vision 2030, likely feeding into existing diversification efforts, but this will not be enough to provide long-term stability to the Saudi political economy, leaving Riyadh wedded to an implicit subsidy system that could invite future instability. Saudi Arabia's Vision 2030 economic transformation program is entering its final four years. Numerous reports have suggested that the Saudi government is refining its approach to it. At Saudi Arabia's Future Investment Initiative on Oct. 28, Investment Minister Khalid al-Falih previewed some of these changes, saying that the Public Investment Fund and the Saudi government should be less involved in backing Vision 2030 and make way for private investment instead. The following day, Reuters reported that the PIF intended to update its medium-term investment strategy by focusing on pragmatic investments domestically, like minerals, artificial intelligence and tourism and back away from the so-called "giga-projects" like the Neom city project, Jeddah Tower and Red Sea Resort project. The shift in priorities comes after years of reporting that Saudi Arabia has been reviewing the viability of giga-projects — the costs of which have ballooned since they were first conceived in the 2000s and 2010s.

• Key Vision 2030 goals have already been met. Saudi unemployment is now around 7% for nationals, down from nearly 13% in 2018; female labor participation has reached 36% from 17% in 2016; and non-oil now drives 56% of the kingdom's real GDP as of October 2025, according to Minister of Economy and Planning Faisal Alibrahim.
• Other projects, like the futuristic city and economic zone of Neom, have slowed or been rolled back. Neom was originally planned to have 1 to 1.5 million people by 2030, but the target has since been reduced to only 300,000. Its current population consists only of construction workers and contractors with no permanent residents. The Jeddah Tower, aiming to be the highest tower in the world, only resumed construction in early 2025 after stalling in 2018, targeting completion in 2028.
• The PIF, a state-controlled sovereign wealth fund that has around $925 billion in assets, still aims to reach $2 trillion by 2030 and is also a major driver of the Saudi economy, contributing 10% of the national non-oil economy in 2024, according to the fund. Vision 2030 aims to pare back the PIF from such a large role in the economy.

Announced in 2016, Vision 2030 was designed to ease Saudi Arabia's reliance on oil revenue in the national budget as concerns grew that peak demand might eventually overwhelm Saudi Arabia's national budget. While parts of Vision 2030 included specific economic metrics, others were aspirational, like transforming the country into a "thriving society" (without specific key performance indicators). Notably, none of its many goals included political or governing objectives beyond improving services and efficiency. This contrasted with previous eras of reform, like under King Abdullah in the 2000s, which saw local elections as one means to offset pressures on the monarchy's long-term legitimacy. Instead, the government carried out crackdowns, rounding up political opponents in the Ritz-Carlton in Riyadh in 2017 and carrying out an expansive campaign against civil and political dissidents at home and abroad as the new crown prince, Mohammed bin Salman, signaled an era of centralization rather than political change.

As Saudi Arabia eases away from giga-projects, its updated investment strategy will provide growth for the non-oil sector but still keep the government as a major driver of growth. Like the nearby United Arab Emirates, which has its own history with delayed or canceled giga-projects, Saudi Arabia is likely to increasingly scale back its involvement in giga-projects as 2030 approaches. Some projects like Neom will likely be left as vestigial prestige projects with partially completed infrastructure that falls far short of initial goals. Other projects may be canceled entirely, particularly those that have not broken ground or made significant progress, like the 2-kilometer-tall Rise Tower planned for Riyadh. Meanwhile, the PIF will refocus its attention on near-term projects, like tourism and critical infrastructure and longer-term ones, like mineral development and turning Saudi Arabia into a logistics hub. Longer-term projects will nevertheless face some scrutiny from the fund in the medium term and may be accelerated or slowed based on the fund's perceptions of their contribution to the non-oil economy. But Riyadh is not suggesting an end to PIF involvement in the economy and will likely continue to back certain sectors and projects throughout this period, keeping the government as a major driver of development, particularly for nascent or long-term projects. This suggests that the political economy — controlled by the monarchy — will remain unchanged.

• Tourism already contributes around 11.5% to Saudi Arabia's overall GDP, driven in part by Hajj pilgrimages but also by growing secular tourism. The secular push has been supported by state media and investments to lure a new generation of tourists to the kingdom after years of comparative isolation, another sign of continued state involvement in development.
• In the United Arab Emirates, projects like the Palm Jumeirah and Masdar City — both gigaprojects from the 2000s and 2010s — have largely been left stagnant or abandoned as a result of economic changes in the drivers of growth in the country. Saudi Arabia's Vision 2030 borrowed heavily from Dubai's development strategy, copying the gigaproject approach to build positive international and domestic sentiment.
• Since 2009, Saudi Arabia's government has contributed over 20% of GDP through spending on goods and services, with recent highs at 27% in 2020 and moderating to 21% in 2024, according to the World Bank.
• Neom's viability has been doubtful from the start due to its remoteness, scale and high technological demands, which would heavily rely on the PIF's open-ended support. The fund's shift toward return-focused investments suggests giga-projects will now advance or stall based on market demand instead of political will. This market discipline may extend to other developments, with the PIF less willing to fund projects lacking clear returns. While ventures like the Red Sea Resort may benefit from the tourism push, others — such as a planned oil rig amusement park and large entertainment and sports complexes in Riyadh — face uncertain prospects given weak underlying demand.

Growth for the non-oil sector is likely to remain robust, driven in part by Saudi Arabia's relatively youthful population, growing investment interest, robust foreign relations and continued demand for Saudi oil, which will allow the government to slow the imposition of taxation or cutbacks in services. Construction, trade, logistics, financial services, tourism and hospitality continue to enjoy robust growth. The PIF continues to have the assets necessary to stabilize their growth in the near term, even in the face of potential global economic slowdowns or recessions. Saudi Arabia's corporate headquarters law has also convinced some major companies to relocate to the kingdom, further boosting its corporate profile and improving business sentiment. With 71% of the population under 35, the youthful population will continue to drive long-term growth, particularly as education levels improve as part of the kingdom's overarching educational reform process. Meanwhile, Saudi Arabia's foreign relations have helped reduce security threats and improved business sentiment, with the kingdom notably staying out of both the Israel-Hamas war and the recent Israel-Iran war despite the involvement of close partners like the United States against Iran and the Houthis in Yemen. Meanwhile, Saudi Arabia has been able to avoid imposing an income tax on its residents and citizens, one of the few ways it might gain a possible tax advantage in the future, as countries like Oman and the United Arab Emirates increasingly plan for such tax structures in the near future. But what is not changing is the Saudi government's role in preventing the business cycle from impacting Saudi living standards.

• Oman intends to introduce an income tax, the first in the Gulf, as its budget remains strained by dwindling oil revenues and increasing spending demands. The United Arab Emirates has no immediate plans for an income tax, but in 2023 it introduced a 15% corporate tax, the first for the country as budgetary pressures incentivized it to find new revenue sources beyond oil. Saudi Arabia already has a high corporate tax rate at 20%, the highest in the Gulf Cooperation Council.
• The International Monetary Fund projects Saudi growth of 4% of GDP in 2025 and potentially 2026 as well, driven by the success of the non-oil sector and the expected upward pressure on oil prices due in part to Western sanctions on Russia and the reimposition of UN sanctions on Iran.
• Like many other countries, a younger workforce is an advantage for the Saudi economy, slowing the increase in healthcare costs, keeping the labor force cheaper, bringing with it fresher skill sets and fueling consumption. This contrasts with aging regions like Europe and the United States, where older workforces are increasingly a driver of slower growth.

As Saudi Arabia reassesses support for its giga-projects, the monarchy is likely to scale back funding for ventures with limited domestic employment impact while continuing to sustain sectors like tourism, technology and finance that are increasingly central to Saudi jobs. Given that many of the giga-projects are employing foreigners rather than Saudis, the political and social impact of allowing them to slow or fail is minimal, freeing up the monarchy to ease off support. But this will not necessarily be the case in all sectors. Tourism, for example, is becoming an increasingly major contributor to Saudi employment. Many educated Saudis are increasingly attracted to working in technology and finance as well. This will increase the monarchy's incentives to prop up these sectors even in the case of a domestic or international slowdown. As a result, even as Vision 2030 comes to a close, the kingdom's implicit social compact, which sees Riyadh subsidize the employment of Saudi citizens, will largely remain intact, fueling inefficiencies in those sectors and remaining a long-term burden on Saudi state spending.

• During the COVID-19 downturn, the Saudi government provided a $35 billion stimulus package to support workers and industries during lockdowns and closures. In addition, there has not been a proposal yet to remove the direct cash transfers of the Citizens' Accounts, introduced in 2017, which are designed to boost Saudi living standards and offset the impact of reforms like the introduction of VAT in 2018.

The Saudi political economy remaining largely unchanged could invite instability in the coming decades if oil revenues are no longer enough to fund subsidies, if subsidies are unable to keep pace with lifestyle demands or if a major geopolitical shock undermines standards of living. Oil's ability to finance Saudi Arabia's subsidies will become increasingly uncertain in the future, with the volatile commodity continuing its historical pattern of fluctuations between gluts and shortages driven by global economic conditions. During periods of gluts when prices are depressed, Saudi Arabia will struggle to meet all subsidy demands and will face pressure to reduce subsidies and fund spending through deficits. Though debt levels, at 30% of GDP, are low, a combination of a sustained decline or flattening of oil prices and an increase in subsidy costs could push Riyadh's debt-to-GDP ratio higher. As a result, in the years and decades to come, subsidies will become a greater burden on the budget and may no longer always be able to keep pace with lifestyle demands necessary to maintain the social contract of economic support in exchange for political stagnation. Meanwhile, should oil prices decline faster, either because of a technological innovation or a global economic downturn, subsidies will feel the pinch. The government could need to take out more debt, cut back on subsidies or both. The subsidy system will not be able to offset the impact of possible major geopolitical shocks like future wars, major economic recessions or ideological changes that can only be offset by legitimacy rather than financial aid and support, increasing the risk that a future shock could invite significant instability.

• Though the timescale for global oil demand peaking remains highly uncertain, when it does, due to a combination of policy changes and technological innovations, it could present a major challenge to Saudi Arabia's subsidy structure.
• Saudi Arabia has struggled to rally the nation to the flag during wartime, such as its Yemeni intervention that began in 2016 and during a military confrontation with Iran in 2019, in part because its political economy does not currently extol a traditional nationalist ethos that might convince citizens to endure hardship for the kingdom, making it uncertain whether its system could withstand an extended military confrontation with a rival like Iran.