Saudi foreign direct investment up 240% to $25.5bn as manufacturing leads boom

The Kingdom has released detailed foreign direct investment (FDI) statistics for 2023 based on new methodology of the Balance of Payments Manual (BPM6) published by the IMF.

These statistics were developed by a detailed analysis of all licensed international investors in the Kingdom. FDI data for 2023 is broken down by economic activity, by investor country, and by administrative region to ensure investors have access to high-level data to inform their investment decisions.

Foreign direct investment in Saudi Arabia

The new statistics show that the actual performance of FDI has exceeded the targets of the National Investment Strategy (NIS). The results show that:

• FDI inflow amounted to SR96bn ($25.5bn) in 2023, exceeding the NIS target of SR83bn ($22bn) by 16 per cent (actual growth rate compared to the year’s target)
• FDI inflow reached 2.4 per cent of GDP in 2023, achieving the NIS target
• FDI inflow grew by 50 per cent in 2023 compared to 2022 after excluding the exceptional Aramco pipeline deal in 2022
• The Kingdom’s FDI stock increased by 13 per cent in 2023 compared to 2022, amounting to approximately SR900bn ($240 bn)

The data demonstrates clear momentum for Saudi Arabia as a globally attractive investment destination, with Vision 2030 programs, sector strategies, and initiatives playing a key role in attracting more foreign investments from around the world.

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.

Additionally, Saudi Arabia ranked 2nd in terms of FDI net inflow growth rate in 2023, and 4th in terms of FDI stock growth rate for the same year.

With regards to market segments, manufacturing was the number one ranked activity in terms of FDI stock, inflow, and net inflow.

In terms of Top 15 countries by ultimate controlling parent (UCP), the United States topped the list with regards to FDI stock, with SR202bn ($54 bn) and 23 per cent of total FDI stock in the Kingdom.

The UAE ranked first among the countries in terms of FDI inflow, with SR13bn ($3 bn), representing 14 per cent of the total.

Since the announcement of Vision 2030 in 2016, key FDI indicators have significantly improved, with the data showing the National Investment Strategy exceeding its targets in 2021, 2022, and 2023. Comparing FDI data since the launch of Saudi Arabia’s Vision 2030:

• FDI inflow nearly tripled, with the average of the last three years (2021-2023) reaching SR112bn ($30bn), following the launch of the NIS, compared to an average of SR43bn ($11.5 bn) from 2013-2015 (before the launch of Saudi Vision 2030)
• Between 2017 and 2023, FDI inflows (gross) increased by more than 240 per cent: from SR28bn ($7.5bn) in 2017 to SR96bn ($25.5bn) in 2023
• Between 2017 and 2023, FDI outflows declined by around 60 per cent: from SR24 bn ($6.5 bn) to SR10 bn ($2.7 bn)
• Between 2017 and 2023, FDI net inflows increased by more than 2,000 per cent: from SR4bn ($1.1 bn) to SR86 bn ($23 bn)
• Between 2017 and 2023, the KSA FDI stock increased by around 80 per cent: from SR502bn ($134bn) to near SR900 bn ($240 bn)
• FDI inflows as a percentage of FDI stock increased from 6 per cent in 2017 to 11 per cent in 2023
• FDI outflow as a percentage of FDI stock declined from 5 per cent in 2017 to 1 per cent in 2023

Minister of Investment Eng. Khalid A. Al Falih said the data convincingly demonstrates the success of Vision 2030 in diversifying and growing the economy, creating a best-in-class investment environment, and providing unprecedented opportunities for investors.

He said: “These detailed numbers show that Vision 2030 and the National Investment Strategy are succeeding in attracting FDI across the country from numerous source countries and into a wide range of sectors.

“It is positive shifts like this in FDI that I expect we will continue to see as more investors enter the fast-growing Saudi market to take advantage of our political stability, long-term economic vision, market size, policy certainty, strong economic, fiscal and monetary fundamentals, and strategic position, which provide an excellent platform to access growth opportunities across the Middle East and beyond.

“While there is still work to do, I am encouraged by the transformation that we are witnessing in the Kingdom, which will only continue to accelerate, underpinned by our ambitious sector strategies including the NIS, and the catalytic role of the PIF, as well as our giga projects.”