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

Saudi Crown Prince Mohammed bin Salman and the South Korean President attend a session of the Future Investment Initiative (SPA)
Saudi Crown Prince Mohammed bin Salman and the South Korean President attend a session of the Future Investment Initiative (SPA)
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Saudi Arabia in 2024: Positive Expectations Underpinned by Political Will and Economic Capacities

Saudi Crown Prince Mohammed bin Salman and the South Korean President attend a session of the Future Investment Initiative (SPA)
Saudi Crown Prince Mohammed bin Salman and the South Korean President attend a session of the Future Investment Initiative (SPA)

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.



Iraq Treads a Tightrope to Avoid Spillover from Israel-Iran Conflict 

Iraqi security forces close a bridge leading to the Green Zone where the US Embassy is located, during a protest against Israeli attacks on multiple cities across Iran, in Baghdad, Iraq, Monday, June 16, 2025. (AP)
Iraqi security forces close a bridge leading to the Green Zone where the US Embassy is located, during a protest against Israeli attacks on multiple cities across Iran, in Baghdad, Iraq, Monday, June 16, 2025. (AP)
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Iraq Treads a Tightrope to Avoid Spillover from Israel-Iran Conflict 

Iraqi security forces close a bridge leading to the Green Zone where the US Embassy is located, during a protest against Israeli attacks on multiple cities across Iran, in Baghdad, Iraq, Monday, June 16, 2025. (AP)
Iraqi security forces close a bridge leading to the Green Zone where the US Embassy is located, during a protest against Israeli attacks on multiple cities across Iran, in Baghdad, Iraq, Monday, June 16, 2025. (AP)

In Iraqi airspace, Iranian missiles and drones have crossed paths with Israeli warplanes, forcing Baghdad to step up efforts to avoid being drawn into the region's latest conflict.

But with Baghdad both an ally of Iran and a strategic partner of the United States, Israel's closest supporter, it may struggle to avoid the fighting spreading to its territory.

"There is a sizable risk of a spillover escalation in Iraq," said political analyst Sajad Jiyad.

"Iraqis have a right to be worried," he added.

With warnings of all-out regional war intensifying following Israel's surprise assault on Iran last week, fears are growing over an intervention by Iran-backed Iraqi factions, which have been calling for the withdrawal of US troops deployed in Iraq as part of an anti-ISIS coalition.

A senior Iraqi security official told AFP on condition of anonymity that among pro-Iran actors "everyone is cooperating with the government to keep Iraq away from conflict."

But Jiyad warned that if the US supports Israel's attacks, it "may lead to pro-Iran elements inside Iraq targeting US troops" or other American interests like the embassy in Baghdad or the consulate in Erbil, the capital of the autonomous Kurdistan region.

This could lead to the US and Israel taking retaliatory actions within Iraq, Jiyad added.

Iraq, which has been for years navigating a delicate balancing act between Tehran and Washington, has long been a fertile ground for proxy battles.

In 2020, during US President Donald Trump's first term, Washington killed Iran's esteemed Revolutionary Guards General Qassem Soleimani in Baghdad.

Most recently, amid the Israel-Hamas war in Gaza, Iraq was on the brink of being drawn into the conflict after pro-Iran factions launched numerous attacks on US troops in the region, as well as mostly failed attacks on Israel, in support of Palestinians.

Washington retaliated by hitting the armed groups.

In recent days, Baghdad has been working diplomatic channels to prevent the latest violence from spreading onto its turf.

It has called on Washington to prevent Israeli jets from using Iraqi airspace to carry out attacks against Iran.

It also asked Iran not to strike US targets in its territory, and was promised "positive things", according to a senior Iraqi official.

Israel's use of Iraq's airspace has angered pro-Iran groups, who accused US troops of allowing it.

Powerful armed faction Kataib Hezbollah stressed that Iran does not need "military support", but it said that the group is "closely monitoring" the US military in the region.

It warned that if Washington intervenes in the war, the group "will act directly against its interests and bases in the region without hesitation."

A US official urged the Iraqi government to "protect diplomatic missions, as well as US military personnel."

"We believe Iraq will be more stable and sovereign by becoming energy independent and distancing itself from Iran's malign influence," the official told AFP, referring to Iraq's dependency on gas imports from Iran.

The official, who spoke on condition of anonymity, warned that Iran-backed groups "continue to engage in violent and destabilizing activities in Iraq."

Israel's surprise attack on Iran targeted military and nuclear facilities and killed many top commanders and atomic scientists. Iran responded by unleashing barrages of missile strikes on Israel.

Tamer Badawi, an expert on Iraqi armed groups, said "the more Iran struggles to sustain its firepower against Israel, the likelier it becomes that Iraqi paramilitary actors will be drawn in."

For now, "Iran is trying to avoid collateral damage to its network by keeping its regional allies on standby. But this posture could shift," he added.

Before launching its attack on Iran, Israel had badly hit Tehran's proxies in the region, significantly weakening some groups, including Lebanon's Hezbollah.

"Beyond attacks within Iraq, Iran-backed Iraqi groups retain the capacity to target Israel from western Iraq using their missile arsenals, as they have done before," Badawi said.

They might also target American interests in Jordan.

But Iraqi officials say they have other plans for their country, which has only recently regained a semblance of stability after decades of devastating conflicts and turmoil.

Iraq is gearing up for its legislative elections in November, which are often marked by heated political wrangling.

For armed groups, elections are a crucial battleground as they strive to secure more seats in parliament.

"Sometimes, the sword must be kept in the sheath, but this does not mean abandoning our weapons," a commander of an armed faction told AFP.

The armed groups will not leave Iran, their "godfather... in the battle alone."