Saudi Arabia's Foreign Direct Investment Inflow Exceeds National Investment Strategy Targets By 16% In 2023

Saudi Arabia has unveiled comprehensive foreign direct investment (FDI) statistics for 2023, utilising the Balance of Payments Manual (BPM6) from the IMF. This data, derived from an in-depth analysis of all licensed international investors in the Kingdom, is categorised by economic activity, investor country, and administrative region. These insights aim to assist investors in making informed decisions.

The FDI inflow for 2023 reached SAR96 billion ($25.5 billion), surpassing the National Investment Strategy (NIS) target of SAR83 billion ($22 billion) by 16%. This inflow represented 2.4% of the GDP, meeting the NIS goal. Excluding a significant Aramco pipeline deal in 2022, FDI inflow grew by 50% compared to the previous year.

Since Vision 2030's announcement in 2016, key FDI indicators have shown remarkable improvement. The average FDI inflow from 2021 to 2023 was SAR112 billion ($30 billion), nearly tripling from an average of SAR43 billion ($11.5 billion) between 2013 and 2015. This growth highlights the success of Vision 2030 and the NIS.

Between 2017 and 2023, gross FDI inflows increased by over 240%, rising from SAR28 billion ($7.5 billion) to SAR96 billion ($25.5 billion). During this period, FDI outflows decreased by about 60%, dropping from SAR24 billion ($6.5 billion) to SAR10 billion ($2.7 billion). Net FDI inflows surged by more than 2,000%, reaching SAR86 billion ($23 billion).

In terms of global rankings among G20 nations for 2023, Saudi Arabia placed 11th for net FDI inflow and 16th for cumulative FDI stock. The Kingdom ranked second in net inflow growth rate and fourth in stock growth rate. Manufacturing led all sectors in terms of FDI stock and inflow.

The United States emerged as the top country for FDI stock with SAR202 billion ($54 billion), accounting for 23% of Saudi Arabia's total FDI stock. Meanwhile, the United Arab Emirates led in terms of FDI inflow with SAR13 billion ($3 billion), representing 14% of the total.

Ministerial Insights on Economic Growth

Minister of Investment Eng. Khalid A. Al-Falih highlighted that these statistics underscore Vision 2030's success in diversifying Saudi Arabia's economy and creating a favourable investment climate. "These detailed numbers show that Vision 2030 and the National Investment Strategy are succeeding in attracting FDI across the country from numerous source countries and into a wide range of sectors," he stated.

Eng. Al-Falih expressed optimism about continued positive shifts in FDI as more investors enter Saudi Arabia's growing market due to its political stability and strategic location. He noted that while challenges remain, ongoing transformations are supported by ambitious sector strategies like NIS and projects led by the Public Investment Fund (PIF).

The full report on Saudi Arabia's Foreign Direct Investment is accessible on the Invest Saudi website, providing further insights into these developments.

Saudi Arabia's efforts to attract foreign investments are clearly yielding results as evidenced by these statistics, reinforcing its position as a key player on the global investment stage while aligning with its long-term economic vision under Vision 2030.

With inputs from SPA