Saudi Arabia draws least foreign direct investment since 2020
Inbound FDI shrank 19% year-on-year to $20.7 billion, the lowest since 2020
Saudi Arabia's foreign direct investment inflows fell for a third straight year in 2024, in a sign the kingdom continues to face challenges in attracting overseas investors.
Inbound FDI shrank 19% year-on-year to $20.7 billion, the lowest since 2020, according to an annual government report that tracks progress on the kingdom's economic diversification efforts.
The preliminary 2024 tally means Saudi Arabia likely missed its annual target of $29 billion. It met its goals in the previous three years, while acknowledging that lower global liquidity and tighter monetary conditions had led to a slowdown.
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Saudi Arabia has been pushing for more FDI as it looks to catalyze growth in new sectors and share the cost of Crown Prince Mohammed bin Salman's multi-trillion dollar economic overhaul. It hopes FDI inflows will eventually grow about five-fold to reach more than $100 billion a year by 2030.
The need for more funding may become ever more acute should global oil prices remain subdued, deepen the government budget deficit and result in cuts to spending, analysts have said. Saudi Arabia's position is that it's willing to run deeper fiscal shortfalls as it prioritizes investing in its economic diversification program, dubbed Vision 2030.
That transformation agenda is due to enter its final phase of delivery in 2026, in which the focus will shift further to private sector investment in a bid to reduce reliance on government support, according to the Vision 2030 report.
Nine years into the plan, some goals have been achieved ahead of schedule, including unemployment, female workforce participation and home ownership. Others like strengthening non-oil GDP are still falling short but making progress, the kingdom said.
Assets under management at the sovereign wealth fund, which is tasked with driving Vision 2030, grew to about $940 billion in 2024. Saudi Arabia is now targeting AUM of $2.67 trillion at the Public Investment Fund by the start of the next decade.
