The kingdom will need a record haul this year to meet its annual target of drawing in US$37 billion
Published Mon, Jun 30, 2025 · 06:50 AM
[RIYADH] Saudi Arabia saw its strongest start to a year for foreign direct investment (FDI) since 2022, in an early signal that the kingdom is gaining some traction in its push to attract overseas capital to support its economic ambitions.
FDI inflows amounted to US$6.4 billion in the first quarter, according to preliminary data released on Sunday (Jun 29) by the General Authority for Statistics. That’s up 24 per cent from a year earlier and down only slightly from the prior quarter, when inflows reached a one-year high.
Saudi Arabia has made FDI a key focus as it aims to draw in foreign capital to help support the heavy investment needed for Crown Prince Mohammed bin Salman’s multi-trillion US dollar economic diversification programme. But the kingdom has faced challenges in doing so, with inflows stagnating until recently amid investor challenges and a lack of mega deals.
The need for FDI is becoming increasingly more acute as Saudi Arabia faces deeper budget deficits due to a combination of low crude prices, falling oil export revenue and elevated investment.
While the past two quarters indicate progress on FDI, the kingdom will need a record haul this year to meet its annual target of drawing in US$37 billion. It fell short of its 2024 goal by several billion US dollars, according to preliminary data.
In other economic figures released on Sunday, Saudi Arabia’s net foreign assets rose to a nine-month high of US$435 billion in May. The Saudi unemployment rate fell to a historic low of 6.3 per cent in the first quarter.
The International Monetary Fund recently highlighted continued strength in the labour market, the economy’s resilience to shocks and said it expects Saudi GDP to grow by 3.5 per cent this year, up from a prior 3 per cent. BLOOMBERG
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