Saudi Arabia says all NEOM megaprojects will go ahead as planned despite reports of scaling back

Saudi Arabia's economy minister rejected recent reports that the kingdom's $1.5 trillion NEOM megaproject, a futuristic desert development on the Red Sea coast, is scaling back some of its plans.

"All projects are moving full steam ahead," Faisal Al Ibrahim told CNBC's Dan Murphy on Monday at the World Economic Forum's special meeting in Riyadh.

"We set out to do something unprecedented and we're doing something unprecedented, and we will deliver something that's unprecedented."

In early April, reports emerged in Western media outlets that The Line project, a planned glass-walled city meant to stretch for 105 miles across the desert by 2030, would be a length of just 1.5 miles by that time — a reduction of 98.6%. Citing anonymous sources with knowledge of the matter, the initial report by Bloomberg said that the Saudi government's original plan to have 1.5 million people living in The Line by 2030 was slashed to 300,000.

The purported scaling back of plans, at least in the medium-term, comes amid reported concerns over finances for NEOM, which is part of the kingdom's broader Vision 2030 initiative to diversify its economy away from oil. Saudi Arabia's sovereign wealth fund, the Public Investment Fund, has not yet approved NEOM's budget for 2024, according to Bloomberg's report.

Al Ibrahim stressed that the projects would be delivered according to plan, but with the qualification that decisions were being made for "optimal economic impact."

"We see feedback from the market, we see more interest from the investors and we'll always prioritize to where we can optimize for optimal economic impact," he said.

"Today the economy in the kingdom is growing faster, but we don't want to overheat it. We don't want to deliver these projects