The foreign direct investment (FDI) in Saudi Arabia jumped to $203.2 billion by the end of 2022, compared to $175.7 billion in 2021.
The General Authority for Statistics (GASTAT) issued the Annual Foreign Direct Investment for 2022 data, showing that the FDI inflow to the Saudi economy rose 20% percent during 2022, reaching $32.8 billion, compared to 2021.
The outflows of foreign direct investment for companies in the Saudi economy grew 12%, reaching $4.5 billion compared to 2021.
Saudi Arabia has significantly grown in net foreign direct investment flows during 2022, reaching $28 billion in 2022, compared to $23.2 billion in 2021.
Transformative industries recorded the highest contribution to the total FDI balance by the end of 2022, with a value of $63.7 billion, with a contribution of 31% of the total balances.
- Third Quarter
Meanwhile, data on the FDI for Q3 revealed that the net foreign direct investment flows in the Kingdom amounted to $2.9 billion, a 10% decrease during Q3 2023, compared to Q2 when it amounted to about $3.4 billion, an increase of 26%, compared to the first quarter of 2023 when it accounted for $2.4 billion.
The value of foreign investment flows out of the Kingdom's economy during the third quarter of 2022 amounted to about $1.33 billion, a 22.5 % decrease, compared to the second quarter of the same year, which amounted to $1.8 billion.
The value of foreign direct investment flows into the Kingdom's economy, dropped 14.4%, with a value of about $4.5 billion, during the third quarter of 2023, compared to the second quarter of the same year, which amounted to about $5.06 billion.
- Quality and transparency
GASTAT President Fahad al-Dossari affirmed that Saudi Arabia's announcement of FDI for the first time adds a new global standard to improve the quality and transparency of the methodology for calculating FDI statistics. It is achieved by providing leading levels of transparency and governance globally.
Dossari highlighted the joint efforts with the International Monetary Fund (IMF) in this project and the integration of roles between the Central Bank and the Ministry of Investment to reach the methodology adopted by GASTAT for calculating the index.
He explained that it will enable investors to make investment decisions based on reliable results that support decision-makers and policymakers, design investment policies that attract more foreign investments, and inform investors about the best investment opportunities in Saudi Arabia.
- New methodology
The new methodology was adopted after alignment with the IMF in the latest methods and the UN Conference on Trade and Development (UNCTAD) confirmation to apply the best practices and international standards according to the Fund's Balance of Payments Manual.
The World Bank supported the recommendations presented by the International Monetary Fund in its recent report on Saudi Arabia, which form the basis of the new methodology.
The new methodology will contribute to enhancing governance levels and improving the quality of transparency in the statistical data and information for calculating direct foreign investment indicators as an investment destination in the Kingdom.
FDI Index includes about 19 new indicators as part of the new methodology approved by the IMF, including the balance and inflows of direct foreign investment by economic activity, investing countries, and regions of Saudi Arabia from 2007 to 2022.
