Foreign direct investment inflows to Saudi Arabia hit $5.17bn
The Kingdom aims to achieve an FDI inflow target of SR388 billion by 2030
Foreign direct investment inflows to Saudi Arabia rose 17 percent in the fourth quarter of 2023 compared to the previous period, according to recent data.
The analysis, released by the General Authority of Statistics, utilizes an updated approach characterized by heightened transparency and governance standards. FDI inflows were shown to have reached SR19.38 billion ($5.17 billion), up from SR16.6 billion in the third quarter.
FDI outflows, representing the Kingdom’s investments in foreign countries, also increased by around 17 percent to SR6.19 billion during this period. Consequently, the net inflow, reflecting the difference between the two, reached SR13.187 billion.
The updated methodology for calculating FDIs aligns with international standards and was developed to enhance accuracy and comprehensiveness through collaborative efforts by the Ministry of Investment, the General Authority for Statistics, and the Saudi Central Bank, in conjunction with the International Monetary Fund.
The new methodology reflects the Kingdom’s commitment to enhancing investment promotion and transparency, aiming to create an attractive global financial environment.
This effort includes initiatives such as the National Investment Strategy, the Regional Headquarters Program, and zero-income tax incentives for foreign companies. These measures are seen as essential for advancing Vision 2030, which aims to expand and diversify Saudi Arabia’s economy.
In 2023, the Kingdom saw a 12 percent increase in FDI inflows, reaching SR72.28 billion compared to SR64.6 billion in 2022. This excludes a major SR58.1 billion deal with Aramco in 2022, where a consortium led by BlackRock Real Assets and Hassana Investment Co. acquired a 49 percent stake in a new gas pipeline subsidiary.
Saudi Arabia’s regional headquarters program has attracted multinational corporations like Google, Microsoft, and Amazon to establish operations in the Kingdom. Additionally, companies such as Northern Trust, Bechtel, and Pepsico from the US, as well as IHG Hotels & Resorts, PwC, and Deloitte from the UK, have joined this initiative.
These moves enable these companies to participate in government contracts, energize Saudi Arabia’s hospitality sector, and establish it as a global business hub.
Looking ahead, the Kingdom aims to achieve an FDI inflow target of SR388 billion by 2030, equivalent to 5.7 percent of gross domestic product, while positioning itself among the 15 largest economies in the world. Last year, Saudi Arabia achieved a significant milestone as its gross domestic product crossed the coveted 1-trillion-dollar mark for the first time.
The Kingdom achieved the GDP of SR4.15 trillion, meeting the state’s goals for 2025.
The Saudi Press Agency cited the Federation of Saudi Chambers’ study reporting that the Kingdom achieved an economic growth rate of 8.7 percent in 2022, the highest among the member states of G20. The report also found that the private sector’s contribution to the economy increased to SR1.63 trillion, or 41 percent of GDP in 2022, with a growth rate of 5.3 percent.
Strengthening the non-oil private sector is a crucial agenda of Saudi Arabia’s Vision 2030, as the Kingdom’s economy has steadily reduced its dependence on oil.
The report added that non-governmental investments increased to SR907.5 billion, with a growth rate of 32.6 percent in 2022, while the number of private workers rose from 8.08 million in 2021 to 9.42 million in 2022.