#SaudiArabia FDI stalls at $5.2 bln in second quarter despite reform drive | Reuters

Saudi Arabian FDI stalls at $5.2 bln in second quarter despite reform drive | Reuters

Foreign direct investment (FDI) into Saudi Arabia stalled in the second quarter at around the same level as a year ago, government data showed on Monday, highlighting the kingdom's need for further reforms to meet its ambitious targets.

Saudi Arabia drew 19.44 billion riyals ($5.18 billion) in FDI, which was little changed from 19.43 billion riyals in Q2 last year, the General Authority of Statistics data showed. Overall, Saudi Arabia recorded net FDI inflows of 11.7 billion riyals in the second quarter, down 7.5% from a year earlier.

Foreign investment is a key element of Saudi Arabia's Vision 2030 plan, spearheaded by Crown Prince Mohammed bin Salman, to boost non-oil growth, expand the private sector and create jobs.

The kingdom has set a goal of attracting $100 billion in FDI by 2030. But halfway through Vision 2030, FDI numbers indicate that it could struggle to meet that target.

Although FDI volumes in Q2 rose 14.5% from the first quarter of 2024, total inflows in the first half were similar to the first six months of last year at 36.41 billion riyals, versus 36.35 billion riyals.

Saudi Arabia last year adopted a new methodology for calculating and publishing FDI data, which led to a significant upwards revision in total figures for 2022.

And the government has said it would update existing investment laws, opens new tab to boost transparency and promote equal treatment of local and foreign investors.
Despite speeding up government efforts, FDI inflows still lag regional peers such as the United Arab Emirates.

"Reforms to enhance Saudi Arabia's attractiveness for foreign investment are progressing," the International Monetary Fund said in a recent country report.

This recognised the record high number of foreign investment licenses and increasing licenses for firms to establish regional headquarters in the country.

"Enhancing private sector development will require providing more clarity to investors and removing remaining bottlenecks identified, including those in the regulatory and business environment," the IMF said.