Saudi Arabia in 2024: Positive Expectations Underpinned by Political Will and Economic Capacities

In an increasingly uncertain world, constants remain our main reference for forecasting the near future. These constants, the factors upon which projections about the future are based, can be summarized into three factors: The first is political will, the primary determinant of the direction a state will take and the objectives it sets.

The second is economic capacity, which enables states to execute their political will and allows them to turn plans into tangible reality.

As for the third factor, it is global changes, which can either positively or negatively affect the implementation of these plans. This is the major cause for uncertainty regarding the future, and state policies play a crucial role in determining it. When applying this perspective to the Kingdom of Saudi Arabia, one can anticipate what the next year might look like.

Saudi Arabia 2023

Starting with political will, domestically, the Kingdom continues to pursue its ambitious Vision 2030 - a pursuit reinforced by the fact that it has achieved targets ahead of schedule. Many of these initiatives have certainly started to bear fruit, especially those that began early in restructuring some of the state's sectors.

The Kingdom did not stop at the programs it launched with the inception of its Vision. It pursued many projects and initiatives in sectors such as tourism, entertainment, and sports. In the latter, the implications of the state's determination to transform plans into reality are particularly evident. In just a few years, the Saudi football league has stolen the spotlight from globally followed football leagues, with the world turning its attention to the Kingdom after the sports sector was restricted and the role of the private sector in the sports system was invigorated.

Since the Vision is comprehensive and encompasses all vital sectors, the interconnections of its different projects and their mutual reinforcement of one another have become evident. For example, recognizing the need for logistical support in the tourism sector, the Public Investment Fund launched Riyadh Air to help the Kingdom reach tourism targets.

This principle of interconnectedness applies to many intersections within the Vision. The progress made in these various sectors is further enhanced by the direct oversight of the Kingdom's senior leadership over national strategies, which ensures the integration and staves off redundancies.

Political will in the Kingdom also has obvious implications for its foreign relations with other countries. For years, the Kingdom has built bridges of communication with the world under the banner of shared interests and the exchange of values. 2022 concluded with the visit of the Chinese President to Riyadh, and these high-level visits continued into 2023, with the Kingdom hosting several major summits, such as the Saudi-African Summit, the Gulf-ASEAN Summit, the Saudi-Caribbean Summit, the Arab Summit, and the Islamic Summit.

The objectives of these summits vary and include political, economic, and cultural aspects. However, the Kingdom takes the same approach to all countries with shared interests and mutual benefits.

The Kingdom also participated in global summits, notably the G20 Summit in India and the Summit for a New Financing Pact in Paris. The impact of these efforts and international visits became apparent when the Kingdom won the bid to host Expo 2030 by attaining the majority of votes from countries and leveraging its strong global relationships.

Economic capacity

The second factor is economic capacity, which may be represented by the state budget for the next year. The Kingdom has continued to expand spending, setting a budget of over 1.2 trillion Riyals, while making conservative revenue projections. The deficit in the state's general budget did not exceed 2 percent, and the government continues to spend on various sectors without making any significant changes, thereby ensuring the continuity of the state's strategies for these sectors and their alignment with the shifts all around us.

While oil revenues decreased due to OPEC's proactive policy to maintain market stability, non-oil revenues continued to increase, reaching 441 billion riyals - about 37 percent of the state's revenues, up from approximately 32.5 percent in 2018.

The Kingdom's capacity to keep up this spending reflects two things: first, it is confident that its economy is solid, and it can sustain this expansionary spending without increasing public debt relative to GDP or depleting its reserves; second, its commitment to pursuing the programs of Vision 2030 and its reassurance about their positive outcomes for the national economy.

Global changes

The third factor is global changes, which can either pose risks or create opportunities for the Kingdom. These changes could be geopolitical, such as the ongoing Russian-Ukrainian war, which affects the stability of oil prices, or changes in the course of Israel’s assault on Gaza, which impacts the entire region, or the Houthi attacks disrupting maritime navigation in the Red Sea.

These changes may also be reflected in the global economy. Global economic growth remains slow due to factors such as inflation, the austere monetary policies adopted by central banks to curb it, and the aftermath of the pandemic, which has had an impact on global supply chains.

Saudi Arabia 2024

The forecasts for the Saudi economy in the next year are generally positive. Fitch predicted that the Saudi economy would grow between 2.6 and 3.3 percent, while Moody's expects growth of around 4.6 percent. The International Monetary Fund (IMF) raised its growth projections for the Kingdom to 4 percent in a short period. The preliminary budget statement from the Ministry of Finance has said that real GDP is expected to grow by 4.4 percent.

These forecasts are driven by several factors, including the events of 2023 and the policies being pursued by the Kingdom. Despite reducing its oil production, the Kingdom's revenues increased this year. This increase was driven by rising non-oil revenues, and these revenues are expected to continue to rise next year, as they have over the past five years.

This increase is due to the increasing role of the private sector, which has been invigorated by various government measures and programs tied to Vision 2030. This approach taken by the Saudi government is to mitigate potential risks in global oil markets. That is among the major axes of Vision 2030, which aims to diversify revenue sources in order to ensure sustainable growth and development in the Kingdom.

The developments seen in 2023 reflect a number of projections. For example, it would not be surprising if Saudi Arabia launched several projects related to its hosting of Expo 2030. These could include determining the location of the event, holding activities such as conferences tied to the Expo, like exhibitions, and strategic plans, and possibly establishing a governmental body tasked with overseeing this major event.

Moreover, we can also expect changes in the Saudi sports sector next year. Given that Saudi Arabia began privatizing clubs by transferring the ownership of four clubs to the Public Investment Fund, this trend could continue next year, with more clubs being transferred to major Saudi companies.

An increase in pace at the Ministry of Sports can also be anticipated in preparation for the expected announcement of its successful bid to host the 2034 FIFA World Cup. This preparation might involve submitting a proposal that includes constructing new stadiums and infrastructure to ensure that the Kingdom provides fans with a distinguished experience and that the sports sector meets the high aspirations that have been set for it.

With Saudi Arabia hosting Expo 2030 and the 2034 World Cup, many infrastructure projects are anticipated. These include ongoing large-scale infrastructure projects in Riyadh, such as King Salman Airport, the Qiddiya Project, King Salman Park, and other significant initiatives. Other cities in the Kingdom that may play an important role, especially in organizing the World Cup, are also expected to see major projects.

Those following the progress being made on Vision 2030 projects can see that it started with several ambitious projects like NEOM, Red Sea, Amaala, and Qiddiya. It began with the launch of numerous projects in Riyadh at the start of Vision 2030, and then we saw other projects in other cities, such as Jeddah Central, Rua Al Medina, and the Sudah and Abha Airport projects.

This might indicate that more projects will be seen in other cities across the Kingdom, whether broad infrastructure projects or sight-specific ones, like agricultural projects suited to cities and their geography and environment. This means that the next year will see the persistence, God willing, of Vision 2030, and the expansion of its initiatives to more Saudi cities that align with their cultural and geographical characteristics.

Flexibility of the Kingdom

The Kingdom has shown itself to be flexible through how it has dealt with economic and political events in recent years. It was not significantly affected by the inflation generated by the pandemic, unlike other countries, and it managed to stave off the negative repercussions of global geopolitical conflicts. Rather, it launched global initiatives aimed at addressing the ramifications of these developments, as it had with its initiatives for global supply chains.

It is not surprising that this approach will continue next year, with precautions being taken to avoid any changes that could negatively impact its economic and strategic interests. The Kingdom will leverage the robustness of its economy and global relationships to find solutions that ensure prosperity, all while maintaining its national project aimed at elevating its strategic and vital sectors.

A change in popes - through death or resignation - is a complicated process, with centuries-old rituals involving the transition in leadership for both the spiritual head of the global Catholic Church and the Vatican´s head of state.

These are the need-to-know terms - some of them in Latin - to help make sense of news in the coming days:

This is the "chamberlain" - the cardinal in charge of formally verifying the pope´s death - and then sealing his room and study. Between then and the election of the new pope, the camerlengo administers the "goods and temporal rights" of the Holy See. The current one is the Irish-born American Cardinal Kevin Farrell.

There are 252 cardinals worldwide, and as a body, they are in charge of the Holy See´s affairs in-between popes, albeit with limits. Of them, 135 are "cardinal electors," who gather in the Vatican to choose the new pope. For centuries, they have chosen one of their own. The vast majority of the electors - 108 - were made cardinals by Pope Francis, according to Vatican statistics.

This is the closed-door meeting of the cardinal electors to choose the new pope in the Sistine Chapel. Its name, literally "with a key," was used in the 13th century to describe the process of locking up the cardinals until the election is completed. It must begin no more than 20 days after the death or resignation of a pope. The electors are sequestered from all outsiders for the duration; the last three popes were chosen within days.

The current dean is Italian Cardinal Giovanni Battista Re. He is the head of the College of Cardinals who informs the rest of the cardinals and the ambassadors to the Holy See of the pope´s death once he learns of it from the camerlengo. He convenes the conclave and presides as the electors take their oaths. Once a new pope is chosen, the dean asks him if he accepts and what name he wants to be called.

This Vatican guesthouse, built in 1996, specifically houses cardinals during a conclave and is used at other times as a hotel for visiting priests and Vatican officials. Pope Francis never moved out after he was elected pope, choosing to live in suite 201, rather than the papal apartments in the Apostolic Palace.

A Latin phrase for "all out," it's spoken by the master for papal liturgical celebrations, currently Italian Archbishop Diego Ravelli, to ask all those present except the cardinal electors to leave the Sistine Chapel to begin the voting process during the conclave.

Each pope gets this ring at the Mass marking the beginning of his pontificate. It bears this name because Jesus told St. Peter, the first pope, that he would be "a fisher of men." Until the 1990s, it was destroyed upon a pope´s death. Now, it´s "annulled," or marked in such a way that it can´t be used as a seal.

This is the name given to the gathering of all members of the College of Cardinals after the pope´s death and before the start of the conclave to discuss major church affairs. All cardinals who aren't infirm take part in this meeting in the Vatican´s Apostolic Palace. They also discuss preparations for the conclave, under oath and in secret.

This Latin phrase translates to "We have a pope." These are the words used by the "protodeacon" of the College of Cardinals to announce from the loggia of St. Peter´s Basilica that a new pope has been elected. He then says the new pope's birth name and the name he has chosen to use as pope, also in Latin. The current protodeacon is French Cardinal Dominique Mamberti.

These are the three cardinals, chosen by a random drawing from the electors, who are charged with gathering the ballots of any electors who are ill during the conclave.

This is Latin for "having had mercy and choosing him" - a phrase that Francis chose as his motto when he was elevated to bishop and kept as his papal seal. It was drawn from the homilies of St. Bede the Venerable, an 8th century monk. It comes from the Gospel narrative of St. Matthew, a tax collector whom Jesus called to follow him.

These are the three cardinals, chosen by random drawing from the electors, who are charged with reviewing the ballots during the conclave.

This is the document, or "deed," listing key details of the pope´s life and papacy that is placed in his coffin. It´s written in Latin by the master for papal liturgical celebrations. A copy is kept in the Vatican archives.

These are the three cardinals, chosen by random drawing from the electors, who are charged with reviewing each ballot and announcing it to the assembled conclave after each round of voting. They then tally the votes - to win the election, two-thirds of the votes are necessary - and they also burn the ballots.

This is Latin for "vacant seat," the period between the pope´s death or resignation and the election of a new one.

This is the basilica in Rome where Pope Francis said he wants to be buried. Francis is breaking with the tradition of his predecessors who are buried inside the Vatican, saying he wanted to be near his favorite icon of the Virgin Mary, the Salus Populi Romani, a Byzantine-style painting of the Madonna draped in a blue robe, holding the infant Jesus who in turn is holding a jeweled golden book. The icon is located in the church first built in the 5th century and devoted to the Virgin Mary. In his will, Francis said he wanted a simple underground tomb with only "Franciscus" written on it.

This Latin phrase means "the Lord´s whole flock." It´s the Vatican constitution that regulates the processes from a pope´s death until a new one is elected. St. John Paul II issued it in 1996 during his papacy, and Pope Benedict XVI twice amended it, most significantly by removing John Paul's provision that after about 12 days of balloting a simple majority could elect a new pope rather than a two-thirds majority. If the conclave lasts that long, the top two vote-getters go to a runoff, with a two-thirds majority required to win. Neither of the top two candidates casts a ballot in the runoff.

After each round of voting in the Sistine Chapel, the ballots are burned in a special furnace to indicate the outcome to the outside world. If no pope is chosen, the ballots are mixed with cartridges containing potassium perchlorate, anthracene (a component of coal tar), and sulfur to produce black smoke. But if there is a winner, the burning ballots are mixed with potassium chlorate, lactose and chloroform resin to produce the white smoke. Bells also are rung to further signal there is a new pope.

Saudi Arabia in 2024: Positive Expectations Underpinned by Political Will and Economic Capacities