The economy of Saudi Arabia has shrunk by 0.5 percent in the current fiscal year. While their gross domestic product was 646.4 billion Riyals last year, it has come down to 643 billion Riyals. This comes as a shock to the economy especially when their oil industry is struggling and they are trying to eventually decrease the dependency on oil for economic growth. This is the result of the introduction of cuts in production of oil because of an OPEC drive, which aims at reducing the current global surplus.

However, while this may seem like a cause of concern for the Saudis; they are expecting the growth rate to become steady by next year. It is contradictory to what economic experts have to say about the situation; who have predicted a weaker pace of growth than what most expect.

One thing that everyone is overlooking in the process is the Vision 2030 Plan introduced by Prince Muhammad Bin Salman. Work on this plan started while he was still deputy crown prince. The plan includes boosting of the non-oil economy, and this is not just limited to domestic ventures but also foreign investment. Saudi Arabia has heavily invested in Britain’s tech industry, in an attempt to ensure that money flows into their economy from all possible means. They also signed a deal with SoftBank, promising $93 billion worth of capital. Tens of billions of dollars of deals have been signed with China and Japan.

Along with this, austerity measures have been introduced into the economy; these include slashing spending and subsidy cuts. So while there is an eminent threat of Saudi Arabia not being able to sustain its economy and according to the IMF, there is a chance that low oil prices will wipe out an estimated $360 billion from the region this year alone; we cannot ignore the fact that Saudi investment goes on at full pace and there are no cuts in defence budget.

This highlights that in order to bridge the gap between the economy, Saudi Arabia makes investments to ensure money keeps on flowing in the economy. There are speculations that the country could invest $20 billion in US infrastructure. These policies say a lot about the approach of the new heir and how he might be able to modernise the economy, despite imminent risks of lowering oil prices.