In the aftermath of the global pandemic, Saudi Arabia has emerged as a leading destination for foreign direct investment (FDI) in the region of West Asia, with an impressive influx of $65.1 billion over a span of three years, up to and including 2023. This achievement places the Kingdom prominently among the top FDI recipients in the area.
Based on the most recent findings from the World Investment Report, Saudi Arabia’s FDI outflows have also been noteworthy, totaling $73.1 billion during the same timeframe. Of this, a significant $16 billion was recorded in the year 2023 alone, positioning the Kingdom 16th in the global ranking for FDI outflows.
Enacting Reforms to Drive FDI
The surge in foreign investments can be attributed to substantial reforms that Saudi Arabia has implemented. These reforms span legal, economic, and social domains and are aligned with the objectives delineated in the National Investment Strategy (NIS) and the broader Vision 2030 agenda. The NIS, which was unveiled in 2021, is aimed at curating holistic investment plans that span a diverse array of sectors including manufacturing, renewable energy, transportation, logistics, tourism, digital infrastructure, and healthcare.
As part of these strategic goals, the Kingdom aspires to elevate annual FDI flows to a stunning $103 billion and to amplify annual domestic investment to in excess of $453 billion by the year 2030. In light of the 2023 data from the UN report, there was a notable 55 percent yearly escalation in the value of international project finance deals in Saudi Arabia, amounting to $22 billion. The nation also experienced a surge in project finance deals, with 19 recorded, denoting a 90 percent increase from the preceding year. Furthermore, the announcement of 389 greenfield projects in 2023, with a combined value of $29 billion, marked a 108 percent yearly growth in value.
Comparative Analysis of Global FDI Movements
On a global scale, FDI saw a slight year-on-year decline of 2 percent in 2023, settling at around $1.3 trillion. The report underscored that this global figure was largely shaped by considerable financial flows that transited through a few European conduit economies.