22 Jul 2024
RIYADH: Saudi Arabia’s foreign direct investment stock reached SR817.7 billion ($218 billion) in the first quarter of 2024, marking a 6.1 percent rise compared to the same period last year, recent data showed.
A report released by the Ministry of Investment indicated that this growth reflects increasing confidence among foreign investors in the Saudi investment ecosystem.
The FDI stock represents the total accumulated value of FDIs held in the Kingdom. It is a cumulative measure that includes all past and present investments made by foreign entities in businesses, real estate, and other assets within the country.
The ministry had previously reported that inflows in the first quarter amounted to approximately SR17 billion, reflecting a growth of 0.6 percent compared to the SR16.9 billion recorded in the same period of 2023.
Brendan Marais, partner at Kearney Middle East & Africa told Arab News that “one of the key factors that sets Saudi Arabia apart from other emerging markets is its deliberate focus on building FDI-attraction capabilities.”
“This strategic approach has significantly boosted the market’s confidence in the Kingdom’s creditworthiness. The $12 billion raised from the sale of multiple-tenor bonds at the beginning of the year and its rise to the third position in the 2024 Kearney FDI Confidence Index from 2023 are clear indicators of the success of these efforts,” he added.
The Kingdom aims to attract $100 billion in FDI by 2030 as part of its broader economic diversification efforts under Vision 2030. Despite global economic challenges, including geopolitical tensions and high interest rates impacting FDI flows worldwide, Saudi Arabia has seen positive annual growth in investments, positioning itself as an attractive destination for international investors.
The Organization for Economic Co-operation and Development latest data indicated that global FDI continued to decline by 12 percent in 2023 compared to the previous year. In contrast, investments into OECD countries increased by 11 percent during the same period, while those into G20 countries decreased by 34 percent.
Meanwhile, FDI inflows in Saudi Arabia grew by 12.1 percent annually, reaching SR72 billion in 2023, excluding the Aramco deal.
Saudi Arabia continues to enhance its attractiveness by improving business laws, fostering human capital development, and nurturing a competitive environment for innovation, which are essential in sustaining its FDI growth trajectory.