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 baby girl froze to death overnight in Gaza, while Israel and Hamas accused each other of complicating ceasefire efforts that could wind down the 14-month war.

The 3-week old baby was the third to die from the cold in Gaza's tent camps in recent days, doctors said, deaths that underscore the squalid conditions, with hundreds of thousands of Palestinians crammed into often ramshackle tents after fleeing Israeli offensives.

Israel’s bombardment and ground invasion of Gaza has killed over 45,000 Palestinians, more than half of them women and children, according to Gaza’s Health Ministry.

The offensive has caused widespread destruction and displaced some 90% of Gaza’s 2.3 million people, often multiple times. Hundreds of thousands are packed into tent camps along the coast as the cold, wet winter sets in. Aid groups have struggled to deliver food and supplies and say there are shortages of blankets, warm clothing and firewood, The AP reported.

Israel has increased the amount of aid it allows into the territory, reaching an average of 130 trucks a day so far this month, up from around 70 a day in October and November. Still, the amount remains well below than previous months and the United Nations says it is unable to distribute more than half the aid because Israeli forces deny permission to move within Gaza or because of rampant lawlessness and theft from trucks.

The father of 3-week-old Sila, Mahmoud al-Faseeh, wrapped her in a blanket to try and keep her warm in their tent in the Muwasi area outside the town of Khan Younis, but it wasn't enough, he told The Associated Press.

He said the tent was not sealed from the wind and the ground was cold, as temperatures on Tuesday night dropped to 9 degrees Celsius (48 degrees Fahrenheit.) Muwasi is a desolate area of dunes and farmland on Gaza’s Mediterranean coast.

“It was very cold overnight and as adults we couldn’t even take it. We couldn’t stay warm,” he said. Sila woke up crying three times overnight and in the morning they found her unresponsive, her body stiff.

“She was like wood,” said al-Faseeh. They rushed her to a field hospital where doctors tried to revive her, but her lungs had already deteriorated. Images of Sila taken by the AP showed the little girl with purple lips, her pale skin blotchy.

Ahmed al-Farra, director of the children’s ward at Nasser Hospital in Khan Younis, confirmed that the baby died of hypothermia. He said two other babies — one 3 days old, the other a month old — had been brought to the hospital over the past 48 hours after dying of hypothermia.

Meanwhile, hopes for a ceasefire looked complicated Wednesday, with Israel and the militant Hamas group that runs Gaza trading accusations of delaying an agreement. In recent weeks, the two sides appeared to be inching toward a deal that would bring home dozens of hostages held by the militants in Gaza, but differences have emerged.

Although Israel and Hamas have expressed optimism that progress was being made toward a deal, sticking points remain over the exchange of hostages for Palestinian prisoners and the withdrawal of Israeli troops from Gaza, people involved in the talks say.

On Wednesday, Hamas accused Israel of introducing new conditions related to the withdrawal from Gaza, the prisoners and the return of displaced people, which it said was delaying the deal.

Israel's government accused Hamas of reneging on understandings that have already been reached.” Still, both sides said discussions are ongoing.

Israel’s negotiating team, which includes members from its intelligence agencies and the military, returned from Qatar on Tuesday evening for internal consultations, following a week of what it called “significant negotiations."

During its Oct. 7, 2023, attack on southern Israel, Hamas and other groups took about 250 people hostages and brought them to Gaza. A previous truce in November 2023 freed more than 100 hostages, while others have been rescued or their remains have been recovered over the past year.

Israel says about 100 hostages remain in Gaza — at least a third whom it believes were killed during the Oct. 7 attack or died in captivity.

Sporadic talks have taken place for a year, but in recent weeks there's been a renewed push to reach a deal.

President-elect Donald Trump, who takes office next month for his second term, has demanded the immediate release of Israeli hostages, saying on social media that if they're not freed before he is sworn in, there will be “HELL TO PAY.”

Families of the hostages are becoming increasingly angry, calling on the Israeli government for a ceasefire before Trump is sworn in.

After Israel’s high-level negotiation team returned from Doha this week, hostage families called an emergency press conference in Tel Aviv, Israel, pleading for a ceasefire and a complete end to the war.

Shir Siegel, the daughter of Israeli-American Keith Siegel, whose mother was released after more than 50 days in captivity, said every delay could endanger their lives. “There are moments when every second is fateful, and this is one of those moments,” she said.

Families of the hostages marked the first night of Hannukah with a candle lighting ceremony in Tel Aviv as well as by the Western Wall in Jerusalem.

The agreement would take effect in phases and include a halt in fighting, an exchange of Israeli hostages for Palestinian prisoners, and a surge in aid to the besieged Gaza, according to Egyptian, Hamas and American officials. The last phase would include the release of any remaining hostages, an end to the war and talks on reconstruction.

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