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Foreign direct investment inflows to Saudi Arabia rose 17 per cent 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 19.38 billion riyals ($5.17bn), up from 16.6bn riyals in the third quarter.
FDI outflows, representing the kingdom’s investments in foreign countries, also increased by around 17pc to 6.19bn riyals during this period. Consequently, the net inflow, reflecting the difference between the two, reached 13.187bn riyals.
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 Programme, 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 12pc increase in FDI inflows, reaching 72.28bn riyals compared to 64.6bn riyals in 2022. This excludes a major 58.1bn riyals deal with Aramco in 2022, where a consortium led by BlackRock Real Assets and Hassana Investment Co. acquired a 49pc stake in a new gas pipeline subsidiary.
Saudi Arabia’s regional headquarters programme 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, energise 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 388bn riyals by 2030, equivalent to 5.7pc of gross domestic product, while positioning itself among the 15 largest economies in the world.
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