The Public Investment Fund of Saudi Arabia experienced a 60% decrease in annual profit while its assets exceeded $1 trillion because of high interest rates and inflation together with project cost overruns.
The fund reported a 25.8 billion riyal net income in 2024 which represented a significant decrease from the 64.4 billion riyal profit in the previous year. The fund explained that budget increases and timeline extensions of major development projects resulted in impairments that caused the profit decline.
The PIF serves as the main instrument for Crown Prince Mohammed bin Salman to execute his “Vision 2030” strategy which aims to reduce Saudi Arabia’s dependence on oil revenue. The PIF supports the development of NEOM through its high-profile investments which will require hundreds of billions of dollars.
Monica Malik from Abu Dhabi Commercial Bank stated that project cost increases have emerged as a major obstacle for the organization. The portfolio has undergone reevaluations because of execution delays and changes in project priorities.
The total assets under management increased by 18% to 4.32 trillion riyals despite profit pressures. The core income sources for the fund consist of dividends from its holdings in Aramco and Saudi National Bank.
The PIF will likely adjust its investment approach to handle increasing costs while sustaining financial stability because global borrowing conditions are becoming more stringent.
