Foreign investment in the Kingdom jumps 120% in 9 years, to hit 2.4% of GDP

The balance of foreign investment in the Kingdom rose by the end of 2023 to reach 897.3 billion riyals, recording a growth estimated at about 13% compared to the previous year. If we go back to the beginning of 2015, we find that the balance was limited to about 408 billion riyals, reflecting an amazing increase of nearly 120% during that period. As for net foreign investment, it reached about 85.5 billion riyals at the end of 2023, up by 474% from 2015. While foreign investment flows recorded about 95.9 billion riyals at the end of 2023. The percentage of foreign direct investment to the gross domestic product reached 2.4% at the end of 2023, as the Kingdom’s Vision 2030 seeks to raise this percentage to 5.7% by 2030.

Foreign investment balance by sector

The foreign investment balance captured 13 vital sectors in the Kingdom, where it crystallized at a percentage of up to 98%. The manufacturing sector represents the largest share, leading the scene with about 29%.

While the wholesale and retail trade and vehicle repair sector comes in second place with 15%. Financial and insurance activities also occupy a prominent position with a share estimated at 12%. The transportation and storage sector also has a similar percentage of up to 12%. As for the construction sector, it accounted for about 9% of the total foreign investment balance, while the mining and quarrying sector recorded 4%, as well as the information and communications sector, which achieved the same percentage.

As for professional and scientific activities, their percentage reached 3%, while the administrative and support services sector also maintained a percentage of 3%. As for real estate activities, they accounted for 2%, as did the electricity, gas and steam sector, in addition to the water and sanitation sector, which recorded a percentage of 2%, and finally the accommodation and food services sector, which constituted 1%.

Foreign investment balance by region: The concentration of foreign investment balance is evident in the Eastern Region, where it amounted to 365.8 billion riyals, while the Riyadh region ranked second with a total estimated at 286.7 billion riyals, while the Makkah region ranked third with a total value of 154.6 billion riyals.

In fourth place, the Medina region came with a total of 53.7 billion riyals, while the Jazan region came in fifth place with a total of 11.9 billion riyals. The five regions in the Kingdom above accounted for the largest share of foreign investment balance.

Saudi Vision 2030 targets for foreign investment: The investment strategy seeks to increase the attraction of foreign direct investment flows until 2030, targeting about 388 billion riyals by the end of 2030, reflecting a rate of about 5.7% of the GDP in that year. Saudi Arabia is looking forward to achieving growth in the GDP to reach 6.5 trillion riyals.

This targeted increase in attracting foreign direct investment will enhance the goals of Vision 2030, as it will contribute to raising the private sector’s share of the GDP to about 65%, and will also contribute to reducing unemployment rates.

These foreign direct investments will contribute to the establishment of new industries and the transfer of advanced technologies, which will improve the performance of the private sector and enhance the contribution of non-oil exports to reach 50% of the GDP, as planned in Vision 2030. In addition, it will achieve an increase in the gross fixed capital formation to reach 30%, while enhancing the role of small and medium enterprises to represent 35% of the GDP by 2030.