SAUDI ARABIA DENTS BIGGEST PLAN EVER TO BOOST ECONOMY WITH COSTLY PROJECTS SHUTTING DOWN

Riyadh, Saudi Arabia - Saudi Arabia is scaling back its ambitious plans for the NEOM mega project due to rising costs, according to three sources speaking with Reuters. The development, which was envisioned as a 26,500-square-km high-tech hub in the Red Sea, has been prioritized to focus on completing essential elements for hosting global sporting events over the next decade.

The shocking reversal comes as the world's top oil exporter grapples with low oil prices and production, forcing it to rein in its spending. According to Monica Malik, chief economist at ADCB, "We're already at that stage where projects are being prioritized. So I think we've already reached that."

Prince Mohammed bin Salman has been pouring hundreds of billions of dollars into development projects through the kingdom's PIF sovereign wealth fund, but this latest move represents a stark adjustment in direction.

The crown prince originally announced NEOM in 2017 with ambitions to generate new engines of economic growth beyond oil. However, significant cost overruns have forced the plan to be scaled back. A consultant familiar with the matter revealed that "When the (NEOM) project was first pitched as an idea, costs were $500 billion. However, The Line alone was going to cost over a trillion which was why it's been scaled back."

The massive project, which is nearly the size of Belgium, aims to house nearly nine million people and become a symbol of Saudi Arabia's efforts to diversify its economy. With rising production costs and low commodity prices weighing on the kingdom's finances, decision-makers have been forced to readjust their priorities.