The Saudi Royal Family are overseeing a number of budget cuts following a historic crash in oil prices earlier this year. While oil prices are showing signs of recovery, they remain far short of the $80+ a barrel required for economic stability in the Kingdom.
One of the key budget cuts being made is to arms spending, Mohammed bin Salman is planning to reduce arms purchases by up to 30% over the next 18 months, holding off on major orders including fighter jets and missile defence systems until oil prices recover. Arms spending has been at a record-high over the past five years, partly due to the protracted war with neighbours Yemen, and a series of threatening incidents from an ever-more erratic Iran.
The Saudi Royal Family are committed to limiting their arms spending as part of a strategy that has seen record tax increases and a reduced commitment to the timeline of mega city Neom’s development. While the Kingdom is predicted to run to a $50billion deficit during 2020, Mohammed bin Salman is doubling down on his foreign investment strategy, ever more eager to diversify away from oil reliance. Recent foreign investments have included Carnival, Live Nation, Disney, and the imminent purchase of English Premier League Club, Newcastle United.
