The Saudi economy amidst war, competition and reassessment
Vision 2030 under pressure
- The reassessment of Vision 2030 in early 2026 introduced clearer priorities and scaled back unrealistic giga projects
- However, the war has threatened these positive changes, raising doubts about Saudi Arabia’s ability to attract foreign investment and develop sectors such as tourism and AI
- The crisis once again highlighted the continued dependence of Saudi economic development on regional stability and oil revenues
- Further recalibration of Vision 2030 is increasingly likely to achieve the original targets
- As a key stakeholder, the EU should support further reassessment and find a better balance between its ties with Saudi Arabia and the United Arab Emirates
The US-Israeli attack on Iran and the subsequent Iranian counterattack across the Middle East have put the Saudi economy between a rock and a hard place. Just before the outbreak of the conflict, the government reviewed its long-term development program Vision 2030.
It made four major changes: 1) more emphasis on attracting foreign investments, 2) greater focus on Saudi competition with the UAE, 3) discontinuing several unrealistic projects and 4) prioritising sectors like AI and tourism. However, all these changes are threatened by wartime physical, economic and political damage. Implementing Vision 2030 successfully has become much more difficult, regardless of the future of the ceasefire of 8 April 2026.
This brief assesses how the war affects Saudi Arabia’s reconfigured Vision 2030 programme and the likelihood of its successful implementation. As a key stakeholder in Vision 2030, the EU should continue to support its reassessment and establish a better balance between the level of its cooperation with Saudi Arabia and the UAE, starting with increasing its diplomatic efforts towards Riyadh.
Introduction
Ten years after its initiation, Saudi Vision 2030 is in trouble. The 28 February US-Israeli attack on Iran has escalated into a war with regional consequences, which Saudi Arabia and the other Gulf states are suffering the brunt of. Beyond immediate damage, Iranian missiles and drones have undermined the image of the Gulf states as safe and secure destinations for foreign capital. Coupled with the prospect of a prolonged conflict and increasing regional instability, the political economic modernisation programmes of Saudi
Arabia and the other Gulf states are at risk.
The war came at a sensitive point in the lifecycle of Vision 2030. At the beginning of 2026, Saudi officials conducted a broad re-evaluation of the national development plan that resulted in, for example, several large-scale flagship projects (or giga projects) being cancelled, put on hold or significantly downgraded. These changes also had leadership ramifications, resulting in a broad reshuffle, including the Minister of Investment, Khalid al-Falih.
This reconfiguration is motivated mostly by cost savings and changing priorities. The drive for ‘spectacle’ was replaced by a more realistic and focused approach that prioritises
a handful of sectors: AI and technology, mining and manufacturing, and tourism. However, the US-Israeli attack on Iran and the subsequent Iranian attacks on the Gulf have put the viability of these changes in question.
The brief analyses the future of the Saudi Vision 2030 programme after its reassessment in January 2026 and in the context of the war since February 28. It starts by outlining Vision 2030’s main functions, continues with an evaluation of Vision 2030 reconfiguration efforts in 2026 and closes with the effects of the war and the
perspective of European interests. Beyond the literature review, the research benefited from several conference discussions and nine semi structured interviews with Saudi and European diplomats, businesspeople and researchers between September 2025 and March 2026.
