Arab News, Sat, Mar 30, 2024 | Ramadan 20, 1445
Foreign direct investment inflows to Saudi Arabia hit $5.17bn
Saudi Arabia:
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.