Saudi Arabia disclosed that foreign direct investment (FDI) inflows amounted to SR17 billion ($4.53 billion) in the third quarter of 2023, as per data from the General Authority of Statistics (GASTAT). This marks the first FDI data release since adopting a new calculation methodology in collaboration with the International Monetary Fund, showcasing a commitment to global standards and enhancing transparency.
Under the new methodology, outflows of FDIs from Saudi Arabia reached SR5 billion, resulting in a net figure of SR11 billion. This indicates a 10% decrease compared to the previous quarter, with a net flow of SR13 billion. The overall stock of FDI in the Kingdom was reported at SR762 billion by the end of 2022.
The Ministry of Investment highlighted that FDI inflows accounted for 3% of the gross domestic product in 2022, surpassing the target for the year. The Eastern Province, Riyadh, and Makkah recorded the highest FDI in 2022, with manufacturing, transportation, storage, wholesale and retail trade, and financial and insurance activities representing 70% of the total FDI stock in that year.
The new methodology, part of Saudi Arabia’s efforts to promote investment and improve data transparency, involves analysing companies’ financial statements, considering ownership rights, debts, receivables, and other factors. It aims to provide accurate and comprehensive data accessible to both local and foreign investors. Saudi Arabia’s broader investment initiatives include the National Investment Strategy, regional headquarters program, and zero-income tax incentives for foreign companies, aligning with Vision 2030 goals for economic expansion and diversification. The goal is to increase the contribution of FDI to GDP to 5.7% and position Saudi Arabia among the top 10 economies in the Global Competitiveness Index by 2030.