Economy

Saudi Arabia quadruples FDI figure to $33bn in 2022

November 8, 2023, 1:36 PM

The Saudi investment ministry, based in Riyadh, said researching the revised FDI figure took 18 months

Saudi ranked 10th in G20
Changed methodology approved by IMF
Team analysed 70,000 financial statements

Foreign direct investment to Saudi Arabia amounted to $33 billion in 2022, the Saudi investment ministry said on Wednesday, revising a previous lower estimate of about $8 billion.

The corrected Saudi number would rank Saudi Arabia 10th amongst G20 economies last year. It also puts Saudi Arabia far ahead of the UAE’s 2022 total of $22.7 billion. The two countries are in competition with each other to attract foreign investment.

The Saudi ministry said in a statement that the updated statistics were based on a change in methodology it said had been approved by the International Monetary Fund and praised by the United Nations Conference on Trade and Development (Unctad), whose annual World Investment Report is the standard source for FDI inflows.

The updated figure, quadruple the previous number, used “an analysis of individual financial statements to produce highly accurate annual numbers,” it said, compared to the previous system using an “accumulation of flows based on estimates”.

The Saudi figures revise statistics going back to 2015, before the Vision 2030 reform programme was launched in 2016 to diversify the economy away from oil.

The Unctad statistics show FDI inflow of $8.14 billion in 2015, but the corrected Saudi number is $17 billion. Rather than a slump from a 10-year high of $19.3 billion in 2021 shown in the Unctad figures, the Saudi corrections show FDI slumping in 2019 and 2020 then shooting higher than a previous high of $29.6 billion in 2016.

“The team went back through the information related to more than 10,000 individual foreign companies analysing more than 70,000 financial statements,” the statement said, adding that the research took 18 months to complete.

The world’s biggest oil exporter, Saudi Arabia has the region’s largest economy with GDP of $1.1 trillion in 2022.

The government expects GDP to slow sharply in 2023 to 0.03 percent, from 8.7 percent in 2022, due to oil output cuts aimed at keeping oil prices high in order to fund the kingdom’s massive development projects.