Foreign Direct Investment in Saudi Arabia rises to $215 billion

Khalid Al Falih, Saudi Minister of Investment, said that the pro-investment measures introduced by Saudi Arabia in recent years include the introduction of the Civil Transactions Law, Private Sector Participation Law, Companies Law, Bankruptcy Law and Special Economic Zones.

These reforms have helped drive rapid investment growth, with gross fixed capital formation increasing by 74 per cent from 2017 to nearly $300 billion in 2023.

Additionally, Foreign Direct Investment (FDI) stock increased by 61 per cent from 2017 to 2023, reaching almost $215 billion in 2023, and FDI inflows have surged by 158 per cent, jumping from $7.5 billion in 2017 to $19.3 billion in 2023. These initiatives and developments, in addition to incentives, facilities, and enablers, have motivated investors to seek a positive, supportive, and stable investment environment, the Saudi Press Agency (SPA) reported.

The minister added, “The law reaffirms Saudi Arabia’s commitment to creating a welcoming and secure environment for investors, driving economic growth, and enhancing the Kingdom’s position as a premier global investment destination.” The policy direction outlined in Vision 2030 allows investors to invest with certainty and to grow with confidence at a time when many other markets are experiencing considerable volatility. The executive regulations will come into effect beginning in 2025.

Separately, Saudi Arabia’s total non-oil merchandise exports to Gulf Cooperation Council (GCC) countries reached SR10.99 billion ($2.9 billion) in May, a significant increase from SR8.43 billion in the same month last year, Arab News reported recently, citing official figures.

According to preliminary data from the General Authority for Statistics, during this period, merchandise imports from GCC countries saw a modest rise from SR6.03 billion to SR6.24 billion. As a result, Saudi Arabia’s non-oil trade balance with the GCC saw a notable improvement, climbing to SR4.74 billion in May from SR2.40 billion a year earlier. The UAE continued to be Saudi Arabia’s largest non-oil trading partner within the GCC. Non-oil exports from the UAE to Saudi Arabia grew from SR4.90 billion in May 2023 to SR6.07 billion this year. Imports from the UAE also increased, rising from SR3.63 billion to SR4.54 billion. This led to an improved trade balance with the UAE of SR1.52 billion, up from SR1.26 billion last year.

Kuwait, however, experienced a decrease in its trade balance with Saudi Arabia, dropping from SR1.26 billion in May 2023 to SR571.4 million this year. This decline was largely due to a significant drop in re-exports, which fell from SR898.2 million to SR147.6 million, alongside a slight reduction in imports from SR158.5 million to SR114.6 million.

Oman saw a substantial improvement in its trade deficit with Saudi Arabia, narrowing to a deficit of SR239.3 million in May from SR887.1 million the previous year. This positive shift was driven by an increase in Omani exports to Saudi Arabia, which rose to SR384.4 million from SR289.8 million, coupled with a reduction in imports to SR623.7 million from SR1.18 billion.

WAM