GDP - Mohammed Bin Salman's 2030 Vision Hits Economic Roadblock: Saudi Arabia Contemplates Unprecedented Borrowing Weighs Aramco Stake Sale | Benzinga
The ambitious development projects in Saudi Arabia are straining the country’s finances, leading to unprecedented borrowing and potential stock sales in its crown jewel, Saudi Aramco.
What Happened: Saudi Arabia has been embarking on a series of high-profile projects, including a $500 billion city and a $48 billion property development. These initiatives, led by the country’s sovereign wealth fund, have significantly depleted the fund’s cash reserves, reported The Wall Street Journal.
To continue funding these projects, the kingdom has resorted to borrowing, a strategy it had previously avoided. Additionally, it is planning to sell more shares in Saudi Aramco, the state-owned oil company, according to the report.
The country’s Crown Prince, Mohammed bin Salman, has been driving the Vision 2030 economic development plan, which aims to transform Saudi Arabia into a diverse economic powerhouse. The plan includes initiatives such as integrating women into the workforce and a more active foreign policy.
"It's mind-boggling the amount of stuff that's trying to be done here," said Tim Callen, a visiting fellow at the Arab Gulf States Institute think tank in Washington. He predicts that the government might have to inject an additional $270 billion into (Public Investment Fund) PIF by 2030. "It will involve taking more risk" fiscally, he said, either by adding debt or lowering ...