Saudi Arabia is reportedly scaling back its most ambitious mega-projects, including NEOM's The Line and Riyadh's Mukaab skyscraper, due to financial constraints and concerns over returns.
The kingdom's budget is under pressure from oil prices hovering around $60 per barrel, significantly below the nearly $100 per barrel needed to balance its budget, as oil still constitutes over 60% of government revenue.
The Public Investment Fund (PIF), with nearly $1 trillion in assets, faces liquidity challenges as much of its capital is locked in long-term, illiquid projects, reducing available cash for new ventures.
There is a strategic pivot towards projects with more immediate and tangible returns, such as hosting Expo 2030 and the 2034 World Cup, and developing AI and data center infrastructure.