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New Saudi methodology doubles 2023 FDI inflow

New calculations put Saudi Arabia's 2023 FDI inflow at double the previously reported figure Ekrem Osmanoglu/Unsplash
New calculations put Saudi Arabia's 2023 FDI inflow at double the previously reported figure
  • FDI recalculated to $25.5bn
  • $100bn inflow target
  • Methodology published last year

Saudi Arabia revised upward its foreign direct investment numbers this week, doubling the FDI inflow figure for 2023 to $25.5 billion according to a new government methodology. 

The kingdom has a target of $100 billion in annual FDI inflows by 2030 but low numbers have put extra pressure on the Public Investment Fund to fund Saudi Arabia’s $1.25 trillion economic development plan. 

The General Authority for Statistics said in March that the country attracted a net inflow of $12.3 billion in 2023

The new figure, published in a Ministry of Investment report, uses a methodology that the Ministry first published in November 2023. That new system quadrupled the 2022 figure to $33 billion from $8 billion. 

It was not clear why the statistics authority had not been using this methodology, which the investment ministry says looks in detail at individual financial statements based on International Monetary Fund recommendations. 

This week the Statistics Authority issued an FDI report for 2023 that now aligns its figures with those of the Ministry of Investment. 

But James Swanston of Capital Economics said the ministry of investment figures are the gross inflow that does not include divestments made by non-residents. Net inflow is the more common international standard. 

“The figure announced by the Ministry of Investment yesterday is reflective of a gross direct investment inflow from non-residents,” he said. “It ignores any incumbent investments in the kingdom by non-residents that are being divested.” 

The Statistics Authority’s report showed that while the gross inflow in 2023 was SAR96 billion ($25.6 billion) – in line with the ministry of investment figure – the net inflow after outflows are taken into account was SAR86 billion ($22.9 billion). 

Saudi Arabia’s giga-projects are suffering delays because of lower oil international prices, which two years of Opec+ output cuts failed to prop up. 

The IMF said this week it has lowered its GDP growth prediction for Saudi Arabia this year to 1.5 percent because the output cuts are to continue to the end of this year. This is after a contraction of 0.8 percent in 2023. 

Trade figures released this week also showed that Saudi oil export revenues declined by $3.2 billion in August 2024 to $17.38 billion compared to $20.58 billion in the same period in 2023. 

The investment ministry said total FDI stock rose by 13 percent in 2023 to SAR900 billion ($240 billion): “Compared to other G20 countries, Saudi Arabia ranked 11th in terms of FDI net inflow and 16th in terms of cumulative FDI stock in 2023.”

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