Saudi Arabia’s foreign direct investment (FDI) balance rose 6.1 percent annually to SAR817.7 billion ($217.88 billion) during the first quarter of 2024, signaling the rising confidence of foreign investors in the Kingdom’s investment environment. A recent report from the Ministry of Investment reveals that the ministry issued 2,728 investment licenses in Q2, excluding licenses related to the campaign to combat violators of the Commercial Concealment Law.
Fixed capital formation rises
In addition to the rise in FDI, Saudi Arabia’s total fixed capital formation grew 8 percent during Q1 due to the increase in both fixed capital formation of the government and non-government sectors by 17.8 percent and 7.2 percent, respectively.
The report also reveals positive growth in the rates of most economic activities during Q1 with wholesale and retail trade and restaurants and hotels activity achieving the highest growth rate of 5.9 percent, followed by transportation, storage, and communications with a 5 percent rise. Meanwhile, collective, social, and personal services in addition to agriculture, forestry, and fisheries rose 4.5 percent and 4.4 percent, respectively.
Labor market thrives
In Q1, FDI inflows to Saudi Arabia rose 0.6 percent year-on-year to SAR17 billion after reaching SAR72.3 billion in 2023.
The report also revealed that the Saudi unemployment rate decreased to 7.6 percent compared to 7.8 percent in Q4 of 2023, bringing it closer to the Saudi Vision 2030 target of 7 percent. Meanwhile, overall inflation witnessed a slight increase to 3.5 percent in Q1 2024 compared to 3.4 percent in Q4 2023.
Strengthening global economic relations
In an effort to further bolster FDI, Saudi Arabia’s investment ministry launched the Saudi-Thai Investment Forum in Riyadh and the opening of the Thai Investment Council in Riyadh, which aim to strengthen economic relations between the Kingdom and Thailand, expand trade exchange, and increase investment.
The launch event also witnessed the signing of 11 agreements and memorandums of understanding in key sectors including agriculture, food, tourism, infrastructure, and energy.
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