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Saudi Arabia Adopts New Methodology to Calculate FDI Data

The Saudi capital Riyadh (AFP)
The Saudi capital Riyadh (AFP)
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Saudi Arabia Adopts New Methodology to Calculate FDI Data

The Saudi capital Riyadh (AFP)
The Saudi capital Riyadh (AFP)

Saudi Arabia, in consultation with the International Monetary Fund (IMF), worked on a new methodology for calculating foreign direct investment statistics, through cooperation between the Ministry of Investment, the General Authority for Statistics (GASTAT), and the Central Bank (SAMA).

The Kingdom said that this methodology aims to improve the quality and transparency of its foreign direct investment data, in accordance with international best practices.

The United Nations Trade and Development Organization (UNCTAD), which issues the World Investment Report, has confirmed that the new methodology follows international standards, in line with the Balance of Payments Manual issued by the IMF.

Minister of Investment Khalid Al Falih said the new methodology was part of the continuing reforms and upgrades to data accuracy and transparency taking place in Saudi Arabia, within the programs of Vision 2030 and the National Investment Strategy (NIS).

"Saudi Arabia offers investors access to the fast-growing Saudi market, the largest in the region, and provides an excellent platform to access regional growth opportunities across the Middle East and beyond,” he stated.

The minister continued: “By improving the transparency and quality of the Kingdom’s FDI statistics, investors will be able to make much more confident and informed decisions, while the Kingdom itself will be able to adapt its policies to attract even more investments.”

According to Al-Falih, Saudi Arabia’s performance in capital formation and attracting FDI has steadily improved, emphasizing the Kingdom’s position as a top investment destination.

For his part, GASTAT President Dr. Fahad Abdullah Aldossari confirmed that the FDI methodology was approved after technical assistance from the IMF, according to the best international practices. The methodology aligns with the IMF’s Balance of Payments Manual, he remarked.

“FDI statistics will help decision-makers in designing policies, in order to create an attractive investment ecosystem and highlight the investment opportunities in the Kingdom," Aldossari said.

“Through this methodology, GASTAT seeks to diversify data sources, increase reliability on sources, and provide more detailed statistics, such as the FDI stock and inflows based on economic activity and countries investing in the Kingdom. Moreover, GASTAT provides FDI data using quarterly surveys,” he added.

Aldossari also noted that this move falls within GASTAT’s efforts to provide accurate and comprehensive statistical data with high quality and transparency.

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Federal Reserve Cuts Key Interest Rate by a Quarter-point

US Federal Reserve Chair Jerome Powell attends a press conference following a two-day meeting of the Federal Open Market Committee on interest rate policy in Washington, US, November 7, 2024. REUTERS/Annabelle Gordon
US Federal Reserve Chair Jerome Powell attends a press conference following a two-day meeting of the Federal Open Market Committee on interest rate policy in Washington, US, November 7, 2024. REUTERS/Annabelle Gordon
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Federal Reserve Cuts Key Interest Rate by a Quarter-point

US Federal Reserve Chair Jerome Powell attends a press conference following a two-day meeting of the Federal Open Market Committee on interest rate policy in Washington, US, November 7, 2024. REUTERS/Annabelle Gordon
US Federal Reserve Chair Jerome Powell attends a press conference following a two-day meeting of the Federal Open Market Committee on interest rate policy in Washington, US, November 7, 2024. REUTERS/Annabelle Gordon

The Federal Reserve cut its key interest rate Thursday by a quarter-point in response to the steady decline in the once-high inflation that had angered Americans and helped drive Donald Trump’s presidential election victory this week.
The rate cut follows a larger half-point reduction in September, and it reflects the Fed’s renewed focus on supporting the job market as well as fighting inflation, which now barely exceeds the central bank’s 2% target, The Associated Press reported.
Asked at a news conference how Trump's election might affect the Fed's policymaking, Chair Jerome Powell said that "in the near term, the election will have no effects on our (interest rate) decisions.”
But Trump’s election, beyond its economic consequences, has raised the specter of meddling by the White House in the Fed’s policy decisions. Trump has argued that as president, he should have a voice in the central bank’s interest rate decisions. The Fed has long guarded its role as an independent agency able to make difficult decisions about borrowing rates, free from political interference. Yet in his previous term in the White House, Trump publicly attacked Powell after the Fed raised rates to fight inflation, and he may do so again.
Asked whether he would resign if Trump asked him to, Powell, who will have a year left in his second four-year term as Fed chair when Trump takes office, replied simply, “No.”
And Powell said that in his view, Trump could not fire or demote him: It would “not be permitted under the law,” he said.
Thursday’s Fed rate cut reduced its benchmark rate to about 4.6%, down from a four-decade high of 5.3%. The Fed had kept its rate that high for more than a year to fight the worst inflation streak in four decades. Annual inflation has since fallen from a 9.1% peak in mid-2022 to a 3 1/2-year low of 2.4% in September.
When its latest policy meeting ended Thursday, the Fed issued a statement noting that the "unemployment rate has moved up but remains low,” and while inflation has fallen closer to the 2% target level, it “remains somewhat elevated.”
After their rate cut in September — their first such move in more than four years — the policymakers had projected that they would make further quarter-point cuts in November and December and four more next year. But with the economy now mostly solid and Wall Street anticipating faster growth, larger budget deficits and higher inflation under a Trump presidency, further rate cuts may have become less likely. Rate cuts by the Fed typically lead over time to lower borrowing costs for consumers and businesses.
Powell declined to be pinned down Thursday on whether the Fed would proceed with an additional quarter-point rate cut in December or the four rate cuts its policymakers penciled in for 2025.