Saudi Arabia has 'no ego' to prevent it from cancelling megaprojects, finance minister says

Saudi Arabia has “no ego” to prevent it from cancelling mega-projects tied to the kingdom’s Vision 2030 plan, the Saudi finance minister said, in the clearest signal yet that the country is reassessing some of its more grandiose projects.

“We have no ego, absolutely no ego,” Saudi Finance Minister Mohammed al-Jadaan said at a briefing in Riyadh after the kingdom unveiled its new budget, Bloomberg reported on Wednesday. 

“If we announce something and we need to adjust it, accelerate it and make it a priority more than others, or defer or cancel it, we will without blinking,” he added.

His comments come amid a bevy of reports that Saudi Arabia is scaling back some of its most futuristic megaprojects, like Neom, a Red Sea development with luxury beach hotels, a ski resort, a 170km-long, futuristic city called "The Line", and an industrial park. 

In November, The Financial Times reported that architects and developers were drastically downsizing The Line, the linear city that forms the centrepiece of Neom and was the brainchild of Saudi Crown Prince Mohammed bin Salman.

A separate FT report over the summer said that the kingdom is falling behind on the construction of Trojena, a desert ski resort. Saudi Arabia has held internal talks about finding an alternative host country for the 2029 Asian Winter Games, amid concerns that it will not meet the deadline.

To be sure, projects like The Line and a desert ski town were the most ambitious and fantastical of a much larger move by the Saudi crown prince to diversify the kingdom’s economy away from a reliance on oil exports.

Saudi Arabia is pushing ahead in sectors where it has a competitive advantage, such as AI, which requires cheap electricity, and tourism, an industry the kingdom is no stranger to as the home of Mecca and Medina, the two holiest cities in the Muslim world.

For example, the kingdom is pressing ahead with a major expansion project outside the Grand Mosque in Mecca, involving the construction of tall towers near the holy site for prayer, accommodation, and hospitality. 

“Spending efficiency doesn’t mean cutting spending,” Jadaan added. “It means decreasing spending on some items to increase on others.”

Saudi Arabia is still trying to draw western visitors. Last month, it appeared to further loosen its restrictions on alcohol sales, with a number of foreign residents saying they were able to purchase drinks at the kingdom's sole liquor store.

What is a budget deficit?

Jadaan’s remarks come after Saudi Arabia unveiled its new budget for 2026, which predicts a significant drop in the kingdom’s deficit to 3.3 percent from 5.3 percent of GDP in 2025.

A budget deficit is the difference between what the government spends and what it takes in through revenue sources such as taxes.

Why Saudi Arabia can spend more money than it makes, even as oil prices drop

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Running a big budget deficit can be a drag on a country’s finances. For example, US President Donald Trump campaigned on promising to reduce the US’s budget deficit to three percent. Some economists have issued near-apocalyptic warnings about the US budget deficit, which hovers around six percent. 

But the US is unique in the world because the dollar is the world’s reserve currency, which analysts say has given presidents on both sides of the American political aisle a safety valve for profligate ways.

Saudi Arabia has its own advantages.

It has a debt-to-GDP ratio of just 30 percent, well below that of other emerging markets, and some of the world’s largest proven oil reserves. Therefore, it has been able to borrow from international creditors who have confidence that they will be repaid. 

"This is a deficit by design," said Jadaan. ”We, by policy choice, will have a deficit until [20]28,” he said.

“Our level of spending in the last three budget cycles has been consistent, but now it is about what we are spending on, rather than how much we are spending," he added.