Saudi Arabia has introduced a new methodology for foreign direct investment (FDI) that promises more precise insights. The Ministry of Investment’s revamped approach dissects individual financial statements for pinpoint accuracy, rather than using prior estimations based on flow accumulations, according to a report by the Saudi Press Agency.
The updated FDI figures were unveiled on November 7th and are the result of a streamlined process initiated in October. The new methodology aligns with global standards set out in the IMF’s Balance of Payments and International Investment Position Manual and was developed through an 18-month collaboration between the Ministry of Investment, the General Authority for Statistics, and the Saudi Central Bank.
The International Monetary Fund has given its endorsement, and the UN Conference on Trade and Development has applauded the initiative.
Examining over 70,000 financial records from over 10,000 foreign enterprises has culminated in a refined FDI data set from 2015 to 2022.
The latest figures show a significant increase in foreign direct investment (FDI) in Saudi Arabia, placing the Kingdom at 16th among G20 countries in 2022 with an FDI stock of SR775 billion ($207 billion). This is in contrast to the previous estimate of SR1 trillion.
In addition, the new methodology has moved Saudi Arabia up to the 10th spot in the G20 for FDI inflows in 2022, with the inflows increasing from about SR30 billion to SR122 billion last year, double the 2015 figures.
Khalid Al-Falih, the Saudi Minister of Investment, has confirmed that the Kingdom is committed to creating an ideal investment environment and emphasised the importance of a strong FDI statistical framework.
“Investors are entering the fast-growing Saudi market with confidence due to its size and strategic position, which provides an excellent platform to access growth opportunities across the Middle East and beyond,” Khalid Al-Falih said.
“The updated data, produced under the new methodology, along with our investor outreach programmes, will allow us to respond to and calibrate the investment environment to attract and retain even more investors,” he added.
The introduction of the new methodology is a strategic move in elevating the Kingdom’s financial profile and attracting foreign direct investment through a reliable record of capital performance.