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FDI Into Saudi Arabia Grows 10.2%

A growth of FDI in Saudi Arabia. (Asharq Al-Awsat)
A growth of FDI in Saudi Arabia. (Asharq Al-Awsat)
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FDI Into Saudi Arabia Grows 10.2%

A growth of FDI in Saudi Arabia. (Asharq Al-Awsat)
A growth of FDI in Saudi Arabia. (Asharq Al-Awsat)

Saudi Arabia attracted SAR 8.1 billion ($2.1 billion) in foreign direct investment in the first quarter of 2023, marking a 10.2 percent growth year-on-year (YOY), showed a government report.

The bulletin disclosed that the Kingdom’s GDP grew by 3.8 percent in Q1 of the year compared to the same period last year.

Moreover, the workforce participation of Saudi citizens stood at 52.4 percent, while unemployment touched 8.5 percent.

The Ministry of Economy and Planning revealed that the deposits of authorities, government, and semi-government parties in May reached SAR 623 billion ($166 billion), an increase of 19.4 percent on a monthly basis.

Furthermore, the volume of banks’ liabilities to the government amounted to SAR 528 billion ($140.8 billion) in May, an increase of 9 percent YOY.

Total consumer spending through ATMs (POS and SADAD) in May amounted to approximately 170.1 billion riyals ($45.3 billion), up 13.8 percent YOY

The bulletin further highlighted a 2.6 percent growth in consumer loans to SAR 448 billion ($119.4 billion) in Q1 compared to the year-ago period.

The Saudi Authority for Industrial Cities and Technology Zones (MODON) has attracted new investments from the private sector at a value of SAR2.77 billion ($738.6 million) during Q2 2023. This was a 23 percent jump from the SR2.26 billion ($602.6 million) recorded during Q2 2022.

MODON said that 1,226 foreign investment deals came from 67 countries, mainly Egypt, Jordan, India, the US, and the UK.

The foreign factories are focused on several main industrial activities such as the manufacture of shaped metal products, the manufacture of rubber and plastic products, other non-metallic mineral products, chemical industry and its products, in addition to the manufacture of food products.

The number of factories exceeded 6,000 during the Q2 of 2023. Industrial contracts also witnessed a 23% growth in the same period.

MODON added that Jeddah - located in the west of the Kingdom - was allocated the greatest number of contracts, comprising 29 percent of the overall agreements. Al-Kharj - located in the center of the Kingdom - issued 13 percent of total agreements.

Among the industries, the food sector secured the most contracts in the second quarter, representing 17 percent, followed by the mining sector at 9 percent. While the chemicals and rubbers sectors claimed 6 percent of contracts each, the machinery and equipment sector secured 5 percent of agreements issued in the second quarter of 2023.

MODON has also developed qualitative capabilities to attract global and regional investments, which contributed to increasing the total number of ready-made factories to reach 1,263 units.

The allocated industrial areas increased by 100 percent and the logistical contracts recorded 234.

In order to achieve its strategic goals of providing services and products that enhance the investments of MODON’s Shareek, achieve business sustainability, and create an enabling investment environment, MODON has made during the Q2 of 2023 several achievements, of which, is the launching of MODON Oasis project in Yanbu on an area of 500,000 square meters.

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Business

IMF and Arab Monetary Fund Sign MoU to Enhance Cooperation

The MoU was signed by IMF Managing Director Dr. Kristalina Georgieva and AMF Director General Dr. Fahad Alturki - SPA
The MoU was signed by IMF Managing Director Dr. Kristalina Georgieva and AMF Director General Dr. Fahad Alturki - SPA
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IMF and Arab Monetary Fund Sign MoU to Enhance Cooperation

The MoU was signed by IMF Managing Director Dr. Kristalina Georgieva and AMF Director General Dr. Fahad Alturki - SPA
The MoU was signed by IMF Managing Director Dr. Kristalina Georgieva and AMF Director General Dr. Fahad Alturki - SPA

The International Monetary Fund (IMF) and the Arab Monetary Fund (AMF) signed a memorandum of understanding (MoU) on the sidelines of the AlUla Conference on Emerging Market Economies (EME) to enhance cooperation between the two institutions.

The MoU was signed by IMF Managing Director Dr. Kristalina Georgieva and AMF Director General Dr. Fahad Alturki, SPA reported.

The agreement aims to strengthen coordination in economic and financial policy areas, including surveillance and lending activities, data and analytical exchange, capacity building, and the provision of technical assistance, in support of regional financial and economic stability.

Both sides affirmed that the MoU represents an important step toward deepening their strategic partnership and strengthening the regional financial safety net, serving member countries and enhancing their ability to address economic challenges.

Business

Saudi Chambers Federation Announces First Saudi-Kuwaiti Business Council

File photo of the Saudi flag/AAWSAT
File photo of the Saudi flag/AAWSAT
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Saudi Chambers Federation Announces First Saudi-Kuwaiti Business Council

File photo of the Saudi flag/AAWSAT
File photo of the Saudi flag/AAWSAT

The Federation of Saudi Chambers announced the formation of the first joint Saudi-Kuwaiti Business Council for its inaugural term (1447–1451 AH) and the election of Salman bin Hassan Al-Oqayel as its chairman.

Al-Oqayel said the council’s formation marks a pivotal milestone in economic relations between Saudi Arabia and Kuwait, reflecting a practical approach to enabling the business sectors in both countries to capitalize on promising investment opportunities and strengthen bilateral trade and investment partnerships, SPA reported.

He noted that trade between Saudi Arabia and Kuwait reached approximately SAR9.5 billion by the end of November 2025, including SAR8 billion in Saudi exports and SAR1.5 billion in Kuwaiti imports.

Business

Leading Harvard Trade Economist Says Saudi Arabia Holds Key to Success in Fragmented Global Economy

Professor Pol Antràs speaks during a panel discussion at the AlUla Conference for Emerging Market Economies (Asharq Al-Awsat).
Professor Pol Antràs speaks during a panel discussion at the AlUla Conference for Emerging Market Economies (Asharq Al-Awsat).
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Leading Harvard Trade Economist Says Saudi Arabia Holds Key to Success in Fragmented Global Economy

Professor Pol Antràs speaks during a panel discussion at the AlUla Conference for Emerging Market Economies (Asharq Al-Awsat).
Professor Pol Antràs speaks during a panel discussion at the AlUla Conference for Emerging Market Economies (Asharq Al-Awsat).

Harvard University economics professor Pol Antràs said Saudi Arabia represents an exceptional model in the shifting global trade landscape, differing fundamentally from traditional emerging-market frameworks. He also stressed that globalization has not ended but has instead re-formed into what he describes as fragmented integration.

Speaking to Asharq Al-Awsat on the sidelines of the AlUla Conference for Emerging Market Economies, Antràs said Saudi Arabia’s Vision-driven structural reforms position the Kingdom to benefit from the ongoing phase of fragmented integration, adding that the country’s strategic focus on logistics transformation and artificial intelligence constitutes a key engine for sustainable growth that extends beyond the volatility of global crises.

Antràs, the Robert G. Ory Professor of Economics at Harvard University, is one of the leading contemporary theorists of international trade. His research, which reshaped understanding of global value chains, focuses on how firms organize cross-border production and how regulation and technological change influence global trade flows and corporate decision-making.

He said conventional classifications of economies often obscure important structural differences, noting that the term emerging markets groups together countries with widely divergent industrial bases. Economies that depend heavily on manufacturing exports rely critically on market access and trade integration and therefore face stronger competitive pressures from Chinese exports that are increasingly shifting toward alternative markets.

Saudi Arabia, by contrast, exports extensively while facing limited direct competition from China in its primary export commodity, a situation that creates a strategic opportunity. The current environment allows the Kingdom to obtain imports from China at lower cost and access a broader range of goods that previously flowed largely toward the United States market.

Addressing how emerging economies should respond to dumping pressures and rising competition, Antràs said countries should minimize protectionist tendencies and instead position themselves as committed participants in the multilateral trading system, allowing foreign producers to access domestic markets while encouraging domestic firms to expand internationally.

He noted that although Chinese dumping presents concerns for countries with manufacturing sectors that compete directly with Chinese production, the risk is lower for Saudi Arabia because it does not maintain a large manufacturing base that overlaps directly with Chinese exports. Lower-cost imports could benefit Saudi consumers, while targeted policy tools such as credit programs, subsidies, and support for firms seeking to redesign and upgrade business models represent more effective responses than broad protectionist measures.

Globalization has not ended

Antràs said globalization continues but through more complex structures, with trade agreements increasingly negotiated through diverse arrangements rather than relying primarily on multilateral negotiations. Trade deals will continue to be concluded, but they are likely to become more complex, with uncertainty remaining a defining feature of the global trading environment.

Interest rates and artificial intelligence

According to Antràs, high global interest rates, combined with the additional risk premiums faced by emerging markets, are constraining investment, particularly in sectors that require export financing, capital expenditure, and continuous quality upgrading.

However, he noted that elevated interest rates partly reflect expectations of stronger long-term growth driven by artificial intelligence and broader technological transformation.

He also said if those growth expectations materialize, productivity gains could enable small and medium-sized enterprises to forecast demand more accurately and identify previously untapped markets, partially offsetting the negative effects of higher borrowing costs.

Employment concerns and the role of government

The Harvard professor warned that labor markets face a dual challenge stemming from intensified Chinese export competition and accelerating job automation driven by artificial intelligence, developments that could lead to significant disruptions, particularly among younger workers. He said governments must adopt proactive strategies requiring substantial fiscal resources to mitigate near-term labor-market shocks.

According to Antràs, productivity growth remains the central condition for success: if new technologies deliver the anticipated productivity gains, governments will gain the fiscal space needed to compensate affected groups and retrain the workforce, achieving a balance between addressing short-term disruptions and investing in long-term strategic gains.