Saudi Arabia's net FDI fall 7pc in Q1
The kingdom drew 22.2 billion riyals ($5.92 billion) in FDI in the three months ended March 31 from 24 billion riyals ($6.40 billion) in the last three months of 2024.
Net FDI rose 44% compared to the same quarter the previous year when the kingdom drew 15.5 billion riyals ($4.13 billion), the General Authority of Statistics data showed.
Raising FDI is a key element of the kingdom's Vision 2030 economic transformation programme, which aims to lower the country's dependence on oil, expand the private sector, and create jobs.
Saudi Arabia has set a goal of attracting $100 billion in FDI by 2030, spending massively on huge development projects known as 'giga projects' and expanding sectors like sports, tourism, and entertainment.
But FDI numbers remain far from that target.
Saudi Arabia has been seen as a source of capital rather than a home for investment, and foreign investors can find it difficult to navigate the kingdom's business environment, sources told Reuters when the FDI goal was first announced in 2021.
The kingdom is projected to post a fiscal deficit of around $27 billion this year, which will largely be financed by borrowing, said a recent report by the International Monetary Fund.
Saudi Arabia was the largest emerging market dollar debt issuer last year, but the IMF says the country has room to continue borrowing, with its net debt around 17% of GDP making it one of the least indebted nations globally.
Riyadh has taken steps to encourage foreign firms to invest more in the country.
Since 2021 companies seeking to secure state contracts have been required to set up their regional headquarters in Saudi Arabia.
The government has also said it would update existing investment laws to boost transparency and promote equal treatment of local and foreign investors.
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