Giga-project slowdown to hit Riyadh population growth

Eliot Blondet/Abaca Press via Reuters

• Target had been 15-20m
• Now 9.2m by 2030
• Businesses may be affected

Riyadh’s population is unlikely to meet a growth target by 2030, when it is due to host the World Expo, as giga-projects are scaled back. 

Crown Prince Mohammed bin Salman set an ambitious goal for the population to grow to between 15 and 20 million in 2021. However it is now absent from the website of the Royal Commission for Riyadh City, the body responsible for its expansion, in an apparent scaling back of the plans. 

The capital is host to some of the biggest projects being developed as part of the country’s economic transformation programme. They include the historical district Diriyah, the New Murabba downtown area and sports and entertainment city Qiddiya. 

---

---

The Public Investment Fund, owner of the projects, has been forced to slow down and cut back some of them because of lower oil prices and low levels of foreign investment. 

A trimmed-down Riyadh could have implications for many businesses that have factored in an expansion to 15 million in their plans. Leading mall operator Cenomi Centers cited the figure in April as justification for five major malls to be built by 2027. 

Akanksha Samdani, senior economist at Oxford Economics in Dubai, says slowing rural migration resulting from delayed giga-projects is a reason for reduced population growth. 

• Saudi summons energy to unearth geothermal potential
• Investment yet to turn a profit in Saudi e-sports drive
• Saudi football spending tipped to tumble as economy falters

“Riyadh’s growth might be slower in the coming decades due to potentially limited inward migration flows,” she says. “As a result, we expect its population to only reach 9.2 million by 2030.

“Mega and giga-projects create demand for migrant workers, particularly in construction, real estate, transportation and non-oil manufacturing sectors. These sectors are on track to achieve the kingdom’s diversification targets, but not necessarily by 2030, without overheating the economy.” 

The official census of 2022 put the population at just over 7 million, and the Riyadh region as a whole at 8.6 million. The Royal Commission did not respond to requests for comment. 

Before Vision 2030’s launch in 2016, Saudi urban planners had notably more sober forecasts and plans for Riyadh’s population growth. 

In 2003, when the city was at a population of 4.5 million, the Royal Commission projected 10.5 million by 2020. However, it feared 17 million if rural migration was not brought under control. Then a report in 2015 predicted 8.3 million by 2028. 

Plans are now being ramped up to boost tourism to 10 percent of GDP by 2030, including a new airport under construction in Riyadh to host second national carrier Riyadh Air, expansion and privatisation of local airports and more licences for budget airlines. 

But the Royal Commission has shifted focus to a more green and liveable city with 9 percent of park space, served by a metro system, though it has been plagued by delays. 

A $7.8 billion budget has been set to help the 2030 World Expo site, on 6 million square metres north of Riyadh, to attract 40 million visitors over the year. 

Despite the forecast, Riyadh is still seen as one of the world’s fastest-growing cities by 2033, according to a recent report by UK realtor Savills. 

“Riyadh is the only city in the top 15 global growth hubs not located in Asia,”world research analyst Charlotte Rushton told AGBI, adding that “population increase is integral to Saudi’s economic goals and is expected to result in continued government spending on mega infrastructure projects.”