Saudi Arabia has investments of more than $770 billion in the US and said it expects relations with Washington “will continue to be flourishing” as the kingdom pursues its broad economic overhaul.
The comments from Finance Minister Mohammed Al-Jadaan at the World Economic Forum in Davos, Switzerland, come fresh on the heels of news that Saudi Arabia is willing to expand investments and trade with the US by $600 billion over the next four years.
“We enjoy a very strong relationship with the US over the years,” Jadaan said in an interview with Bloomberg Television. “We have a relationship that spans over eight decades. Very strategic, based on economy and trade, and will continue.”
Relations with Europe and China will also continue to grow as Saudi Arabia presses ahead with its strategy to build new industries and develop the non-oil economy, Jadaan said. While some plans under the so-called Vision 2030 agenda have been recalibrated to consider priorities and risks to the economy, reforms remain on track, he added.
Under Saudi Crown Prince Mohammed bin Salman, the kingdom is investing hundreds of billions of dollars on preparations for a post-oil future. The country has started to scale back some projects, Bloomberg has reported, in part because oil prices have been stuck below levels that are needed to balance the country’s budget.
Saudi Arabia needs Brent crude prices at north of $90 a barrel this year to reach fiscal equilibrium, the International Monetary Fund has said. The benchmark has risen this year to trade near $80 but remains far off that target.
The government has projected it will run annual budget deficits through at least 2027 as it prioritizes investments on its domestic economy. To address that gap, the kingdom and the sovereign wealth fund known as PIF have been raising money from debt sales.
Saudi Arabia tapped international bond markets for $12 billion earlier this month, while the PIF raised $4 billion through a debt offering this week.
The IMF downgraded its growth forecasts for Saudi Arabia by 1.3 percentage point to 3.3% for this year, citing the decision by the OPEC+ oil alliance to extend production cuts.
The government also slashed its own forecasts in September and sees growth at 4.6% this year, and 3.5% for 2026. Growth of close to 4% over the next few years would still outpace most other growth in Group-of-20 nations.
When asked about foreign direct investment, Jadaan stressed the importance of local investors in reaching the kingdom’s goal to drawn in more than $100 billion of foreign capital a year by 2030.
“If you are not able to convince local investors to invest, you will not be able to convince foreign investors,” he said.
