Economy Saudi FDI inflow up but still well below target By Andrew Hammond July 1, 2024, 9:20 AM Alamy via Reuters Abu Bakr, a historical mosque in Medina. Non-oil sectors such as religious tourism now account for 50 percent of the Saudi economy FDI inflow $4.5bn in Q1 Target is $100bn a year FDI helps fund giga-projects Saudi Arabia recorded a year-on-year increase in foreign direct investment inflow of 0.6 percent to SAR17 billion ($4.5 billion) in the first quarter, still far below government targets as it struggles to find funding for its giga-projects. FDI inflow was also up on the previous quarter’s SAR13 billion. Net inflow was SAR9.5 billion when outflow of SAR7.5 billion is taken into account, the data released by the General Authority for Statistics showed. NewsletterGet the Best of AGBI delivered straight to your inbox every week Total net inflow for 2023 was SAR46 billion, below the SAR375 billion ($100 billion) a year that has been set as a target by 2030, as well as 2022’s SAR123 billion inflow. The economy contracted 0.8 percent in 2023 as a result of an ongoing Opec+ policy of oil output cuts in an effort to prop up global oil prices. China’s slowing economy and global inflation could also play a role. But the non-oil economy has grown and now accounts for 50 percent of GDP. In its effort to boost FDI, the government has adopted a new commercial code to make courts easier to navigate for foreign companies and is pushing banks to open regional offices to ensure access to lucrative contracts to manage bond issuances. Kuwait opens wealth fund office in Saudi Arabia Gulf to ‘see more rather than less’ despite China’s slowing economy Futuristic architect lands arts centre in Saudi’s Qiddiya Amid low FDI and lower oil prices the government is looking for alternative funding sources for its economic reform plan, managed by the Public Investment Fund. Kuwait’s sovereign wealth fund said last week it would open an office in Saudi Arabia and a Saudi business delegation recently visited Qatar for industrial investments. Saudi Arabia has raised $17 billion in debt markets this year, PIF saved at least $15 billion by divesting from US equities, and the government doubled PIF’s stake in the oil giant Aramco to 16 percent.
