Moody’s sees Saudi Arabia reprioritizing toward projects that generate liquidity sooner

Saudi Arabia could delay or restructure some giga-projects and move money toward developments that generate liquidity sooner, Moody’s says. PIF spending over 2026-2030 is forecast at SAR 600-800 bn, against around SAR 750 bn in 2021-2025, with tourism, housing, mining, manufacturing, logistics, AI, and digital infrastructure being the priority sectors, according to a report (pdf) presented at the agency’s Riyadh Media Briefing, attended by EnterpriseAM.

Which projects sit where: More advanced developments, including some Red Sea assets, are better positioned to generate cashflow, while earlier-stage projects such as Jeddah Central remain more dependent on financing and execution, Moody’s said. It also points to restructuring of financing arrangements linked to Neom.

Behind the shift is a wider deficit. The Kingdom raised its projected budget deficit to SAR 245 bn, or 4.9% of GDP, from SAR 165 bn, or 3.3% of GDP. Government spending is forecast at SAR 1.435 tn, against revenue of SAR 1.2 tn. Moody’s has cut its oil production forecast to 7.7 mn bbl / d for 2026 from 8.4 mn, and to 9.9 mn bbl / d for 2027 from 10.3 mn, according to one of the agency’s reports (pdf). The government expects GDP to contract 3.6% this year before expanding 12.8% next, while Moody’s has a 3.3% contraction followed by 8.5% growth.

The buffers behind that are substantial. Liquid government financial assets, net of direct debt owed by the PIF, run to around 18% of GDP, with deposits at Sama above 9%. Alternative export routes and reserves support the credit profile, though prolonged disruption through the Strait of Hormuz or the Red Sea could erode them. Government debt could reach around 40% of GDP by the end of the decade.

The Kingdom is separately targeting 1.5 GW of data center capacity and 1.9 GW of AI computing capacity by 2030, and Humain and stc have signed an MoU for a joint venture of up to 1 GW. Moody’s says the credit implications depend on capital requirements, funding sources and whether the capacity generates revenue.