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.

With flies buzzing all around them, the woman and her daughter picked through the pile of garbage bags for scraps of food at the foot of a destroyed building in Gaza City. She found a small pile of cooked rice, a few scraps of bread, a box with some smears of white cheese still inside.

Islam Abu Taeima picked soggy bits from a piece of bread and put the dry part in her sack. She will take what she found back to the school where she and hundreds of other families live, boil it and serve it to her five children, she said.

“We’re dying of hunger,” she said. “If we don’t eat, we’ll die.”

Her rummaging for food is a new sign of the depths of desperation being reached in Gaza, where the population of some 2.3 million has been pushed toward famine by Israel’s nearly three-month blockade. The entry of a small amount of aid in the past week has done almost nothing to ease the situation, The AP news reported.

Before the war, it was rare to see anyone searching through garbage for anything, despite the widespread poverty in the Gaza Strip.

Since Israel launched its military campaign decimating the strip after Hamas’ Oct. 7, 2023, attacks, it has been common to see children searching through growing, stinking piles of uncollected garbage for wood or plastic to burn in their family's cooking fire or for anything worth selling — but not for food. For food, they might search through the rubble of damaged buildings, hoping for abandoned canned goods.

But Abu Taeima says she has no options left. She and her 9-year-old daughter Waed wander around Gaza City, looking for leftovers discarded in the trash.

“This is our life day to day,” she said. “If we don’t gather anything, then we don’t eat.”

It's still not common, but now people picking food from trash are occasionally seen. Some come out after dark because of the shame.

“I feel sorry for myself because I’m educated and despite that I’m eating from the trash,” said Abu Taeima, who has a bachelor’s degree in English from Al-Quds Open University in Gaza.

Her family struggled to get by even before the war, she said. Abu Taeima has worked for a short time in the past as a secretary for UNRWA, the main UN agency for Palestinian refugees and the biggest employer in Gaza. She also worked as a reader for blind people. Her husband worked briefly as a security guard for UNRWA. He was wounded in the 2021 war between Hamas and Israel and has been unable to work since.

Israel cut off all food, medicine and other supplies to Gaza on March 2. It said the blockade and its subsequent resumption of the war aimed to pressure Hamas to release the hostages it still holds. But warnings of famine have stoked international criticism of Israel.

It allowed several hundred trucks into Gaza last week. But much of it hasn’t reached the population, either aid trucks were looted or because of Israeli military restrictions on aid workers’ movements, especially in northern Gaza, according to the UN Aid groups say the amount of supplies allowed in is nowhere near enough to meet mounting needs.

Abu Taeima and her family fled their home in the Shati refugee camp on the northern side of Gaza City in November 2023. At the time she and one of her children were wounded in a tank shelling, she said.

They first headed to the strip’s southernmost city of Rafah where they sheltered in a tent for five months. They then moved to the central town of Deir al-Balah a year ago when Israel first invaded Rafah.

During a two-month ceasefire that began in January, they went back to Shati, but their landlord refused to let them back into their apartment because they couldn’t pay rent, she said.

Several schools-turned-shelters in Gaza City at first refused to receive them because they were designated for people who fled towns in northern Gaza. Only when she threatened to set herself and her family on fire did one school give them a space, she said.

Abu Taeima said her family can’t afford anything in the market, where prices have skyrocketed for the little food that remains on sale. She said she has tried going to charity kitchens, but every time they run out of food before she gets any. Such kitchens, producing free meals, have become the last source of food for many in Gaza, and giant crowds flood them every day, pushing and shoving to get a meal.

“People are struggling, and no one is going to be generous with you,” she said. “So collecting from the trash is better.”

The risk of catching disease isn't at the top of her list of worries.

“Starvation is the biggest disease,” she said.

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