Saudi Arabia sees 5.6% rise in FDI in Q1 2024 /node/2540491/business-economy
Saudi Arabia sees 5.6% rise in FDI in Q1 2024
According to the latest data from the General Authority for Statistics, the net flow of FDI reached SR9.5 billion ($2.53 billion) in the first three months of this year, up from SR9 billion recorded during the same period last year. Shutterstock
RIYADH: Saudi Arabia saw a 5.6 percent increase in net flow of foreign direct investment in the first quarter of 2024 compared to the previous year, the official data showed.
According to the latest figures from the General Authority for Statistics, the net flow of FDI reached SR9.5 billion ($2.53 billion) in the first three months of this year, up from SR9 billion recorded during the same period last year.
This growth underscores Saudi Arabia’s continuing appeal to international investors. These figures reflect the Kingdom’s ongoing efforts to enhance its investment environment and support economic growth, in line with the objectives of Vision 2030.
FDI inflows during the first quarter amounted to around SR17 billion, marking a growth of 0.6 percent from the SR16.9 billion recorded in the first quarter of 2023. This moderate increase highlights the sustained confidence of foreign investors in the Saudi market.
Conversely, FDI outflows during the first three months of this year totaled about SR7.5 billion, representing a decrease of 5.1 percent compared to SR8 billion in the first quarter of 2023. This decline in outflows indicates a stronger retention of foreign capital within the Kingdom.
In accordance with the goals set out in the National Investment Strategy and Vision 2030 targets, Saudi Arabia has enacted substantial legal, economic, and social reforms aimed at stimulating inflows of foreign direct investment.
Launched in 2021, NIS looks to develop comprehensive investment plans across various sectors, such as manufacturing, renewable energy, and transport as well as logistics, tourism, digital infrastructure, and healthcare.
Furthermore, it aims to increase annual FDI flows to over $103 billion and boost annual domestic investment to more than $453 billion by 2030.
According to the World Investment Report released earlier this month by the UN Conference on Trade and Development, Saudi Arabia attracted $65.1 billion in FDI in the three years post-pandemic until 2023, placing it among West Asia’s top recipients.
The Kingdom’s FDI outflows totaled $73.1 billion over the same period, with $16 billion recorded last year alone. This ranks Saudi Arabia among the top 20 global economies for FDI outflows, placing 16th.
The UN report also noted a 55 percent annual increase in the value of international project finance deals in the Kingdom in 2023, reaching $22 billion.
Last year, the nation witnessed 19 deals, marking a 90 percent growth compared to the previous year.
Additionally, Saudi Arabia saw 389 announced greenfield projects in 2023, totaling $29 billion, reflecting a 108 percent annual increase in value.
Iran ready to strengthen economic ties with Saudi Arabia, says minister
Updated 16 February 2025
Nadin Hassan
RIYADH: Iran is prepared to enhance its economic and investment ties with Saudi Arabia, including the potential for joint projects. However, progress is contingent upon mutual willingness, according to a senior Iranian official.
In an interview with Arab News on the sidelines of the AlUla Conference for Emerging Market Economies, Abdolnaser Hemmati, Iran’s minister of economic affairs and finance, emphasized that specific agreements would be necessary to facilitate trade between the two nations.
“We are ready to boost our economic relation and investment relation between two countries and joint investment projects between two countries. But this depends on them, and I think the situation of the region is going to that era. We must start to have good relations with all together,” Hemmati said.
He added: “For starting and upgrading trade between two countries, we need to have some agreements. The main agreements is about eliminating double tax, bilateral investment, and also custom rules.”
Hemmati also emphasized Iran’s commitment to strengthening ties with neighboring countries, particularly Saudi Arabia, Qatar, and Oman.
The aim is to bolster both political and economic relations, with a strong focus on enhancing trade and commerce.
He added: “The first important matter is that growing political relations needs to upgrade our economic relations especially in the field of commerce and trade between two countries.”
Hemmati stressed the importance of fostering economic relations among countries in the region to safeguard against external interference. He highlighted that strong economic cooperation is essential for maintaining regional autonomy and stability.
At the conference, a key topic of discussion was the challenges and opportunities facing regional nations, with a particular emphasis on building economic resilience.
Hemmati reiterated that robust economic ties between neighboring countries are vital in order to prevent outside influence in their affairs.
Economic resilience, according to the minister, depends on strengthening cooperation among neighboring countries.
“The future of the region needs to have good economic relations between the member countries of the region,” Hemmati concluded.
Therefore, the future of the region depends on fostering strong economic ties between member countries to ensure long-term stability, security, and prosperity.
China’s central bank governor highlights key challenges for emerging markets at AlUla conference
Pan Gongsheng emphasized need for proactive policy measures and strengthened multilateral cooperation to enhance economic resilience
He said increasing geopolitical conflicts and protectionism disrupt international value chains and restrict flow of capital, technology, and labor
Updated 16 February 2025
NOUR EL-SHAERI
RIYADH: Emerging market economies are facing escalating challenges, including geopolitical tensions, sluggish global growth, financial volatility, and increasing public debt, according to the governor of the People’s Bank of China.
Speaking at the two-day AlUla Conference for Emerging Market Economies, organized by the Saudi Ministry of Finance and the International Monetary Fund, Pan Gongsheng emphasized the need for proactive policy measures and strengthened multilateral cooperation to enhance economic resilience.
“In my view, emerging markets face four key challenges,” Gongsheng said. “The first challenge is geopolitical tension.” He highlighted how increasing geopolitical conflicts and protectionism disrupt international value chains and restrict the flow of capital, technology, and labor.
“There has been a drop in global growth and productivity gains and the rising divergences in key industries across countries, mainly due to uneven development and resource misallocation,” he said.
Pan Gongsheng, the governor of the People’s Bank of China, speaks during the AlUla Conference for Emerging Market Economies. AN Photo
Gongsheng’s remarks align with the IMF’s recent report, which warns that friendshoring — the practice of countries trading primarily with geopolitical allies — could reduce global economic output by up to 1.8 percent.
Emerging markets, particularly in Asia, may experience up to 6 percent declines due to this shift.
Despite these warnings, a Financial Times report said China has intensified its control over technology and resources, including restricting key battery technology exports, disrupting global value chains, and escalating geopolitical tensions.
Gongsheng identified the second challenge as the slower medium-term growth of the international economy.
“We are now facing policy uncertainties in some economies. If protectionism escalates, rising trade fluctuations will drive up inflation expectations and undermine medium-term growth,” he added.
Pan Gongsheng, the governor of the People’s Bank of China, warned that growing investor concerns over fiscal sustainability could trigger government bond market volatility. AN Photo
Citing IMF forecasts, he said global economic growth is projected to hover at just 3 percent in the medium term, the lowest level since 2000.
Financial market volatility and capital outflows represent the third major challenge.
“The trajectory of the interest rate in major advanced economies remains highly uncertain,” Gongsheng said.
“Markets have become particularly sensitive to unexpected economic data. If rates differ and rise significantly from market expectations, market repricing may increase asset price volatility in emerging markets.”
This aligns with a recent Reuters report, which said emerging markets are facing significant challenges due to a strong US dollar and high treasury yields.
— AlUla Conference for Emerging Market Economies (@AlUlaCEME) February 16, 2025
These factors have led to weaker local currencies, increased costs for servicing dollar-denominated debt, reduced capital inflows, and dampened economic growth.
Policymakers in these regions find it difficult to counteract these pressures effectively, which are further heightened by new US tariff and trade policies.
The fourth issue Gongsheng discussed was the burden of high public debt and its implications for financial stability.
“The IMF points out that global public debt risk has risen significantly due to political and other factors. Those risks not only exist in developing countries — the level of public debt in some advanced economies also merits close attention,” he said.
He warned that growing investor concerns over fiscal sustainability could trigger government bond market volatility, with potential spillover effects on other asset classes, liquidity risks, and financial stability.
According to a report by the Institute of International Finance, the global debt stock increased by over $12 trillion in the first three quarters of last year, reaching nearly $323 trillion.
Pan Gongsheng, the governor of the People’s Bank of China, stressed the importance of multilateralism and global financial governance reform. AN Photo
The IIF attributes the rise to declining borrowing costs and a heightened risk appetite among investors, underscoring concerns similar to those expressed by the governor.
To address these challenges, Gongsheng outlined key policy responses for emerging markets.
“First, we should continue improving monetary policy frameworks, enhancing the efficiency of monetary policy transmission, increasing policy transparency, and improving policy communication,” he said.
He also advocated for increased exchange rate flexibility, stronger public debt management, improved macroprudential regulations, and the development of local currency markets to mitigate capital flow risks.
Gongsheng stressed the importance of multilateralism and global financial governance reform.
“The IMF has made great progress in surveillance and governance reform. At the same time, there is still more work to be done for us to advance global financial governance reform,” he said.
He called on the IMF to enhance support for developing countries, promote trade and investment liberalization, and establish comprehensive policy tools to help emerging markets address capital flow risks and external shocks.
“The current quota shares can no longer reflect the actual position of emerging markets in the global economy,” Gongsheng said, urging the IMF to establish a “concrete and binding timetable” for future quota realignments, with discussions on fiscal realignment plans set by June.
Ministers urge fiscal discipline, smart investment to tackle debt challenges
Updated 16 February 2025
Miguel Hadchity
RIYADH: Effective debt restructuring requires a thorough understanding of its root causes, said the Russian finance minister at the AlUla Conference for Emerging Market Economies.
Speaking during a panel titled “High Debt-Low Fiscal Space—Fiscal Consolidation and Multilateral Solutions to Debt Restructuring,” Anton Siluanov emphasized that fiscal prudence and policy monitoring are essential in addressing economic challenges.
“When we restructure the debt, we must be fully cognizant of the underlying causes,” Siluanov said, stressing the importance of careful analysis before implementing financial adjustments.
He further underscored the responsibility of finance ministries to adopt prudent fiscal policies, ensuring that governments do not exacerbate their debt situations. “If it’s difficult to cut costs, don’t blow them, don’t increase them,” he warned.
The panelists highlighted the need for efficient and targeted financial measures. Mauricio Cardenas, a professor at Columbia University and former Colombian finance minister, argued against indiscriminate budget cuts, saying: “I don’t believe in across-the-board cuts in government expenditures because governments have priorities, countries also have priorities.”
Instead, he called for channeling financial resources more effectively to stimulate economic growth and stability. “In essence, channeling more financing, making sure that financing is more efficient is crucial.”
Saudi Finance Minister Mohammed Al-Jadaan reinforced the importance of strategic financial planning, urging countries to “utilize your fiscal space in the most optimal way.”
His remarks were particularly relevant in the context of Saudi Arabia’s economic positioning, as the Kingdom continues to lead major financial initiatives in the region.
Zambian Finance Minister Situmbeko Musokotwane pointed to investment opportunities in resource-rich nations, particularly critical minerals necessary for global decarbonization efforts.
“Countries like Saudi Arabia, with a lot of financial capital, the good news is that with the efforts to decarbonize the materials—copper, manganese, nickel, and so forth—they’re in my country, so come and invest,” he said.
The discussion underscored the necessity of maintaining fiscal discipline while ensuring targeted investments that drive sustainable economic growth.
The panelists agreed that careful financial oversight, efficient resource allocation, and strategic investment remain central to overcoming debt challenges in emerging markets.
The two-day summit, held in the Arabian oasis of AlUla, aims to generate actionable recommendations to strengthen financial stability and promote sustainable growth in emerging economies.
Key discussions will focus on the role of artificial intelligence and digital transformation in driving economic progress. Participants will explore strategies for enhancing economic resilience and fostering stronger cooperation between emerging and advanced economies to promote a more equitable and sustainable future.
Financial discipline crucial while pursuing economic diversification efforts: Qatari minister
Qatar’s minister of finance said Middle East countries have engaged in healthy competition as they pursue economic diversification
He was speaking during a panel discussion at the AlUla Conference for Emerging Market Economies
Updated 16 February 2025
Nirmal Narayanan
RIYADH: Maintaining financial discipline is crucial for countries in the Middle East as they work to diversify their economies and reduce reliance on energy revenues, according to a Qatari minister.
During a panel discussion at the AlUla Conference for Emerging Market Economies organized by the Saudi Ministry of Finance and the International Monetary Fund, Ali bin Ahmed Al-Kuwari, Qatar’s minister of finance, said that countries in the Middle East have engaged in healthy competition as they pursue their economic diversification journeys.
Saudi Arabia’s Vision 2030, Qatar’s Vision 2030, and the UAE’s Vision 2031 programs are focused on transitioning from a hydrocarbon-based economy to a knowledge-driven one.
The President and Chair of the Asian Infrastructure Investment Bank (@AIIB_Official) highlights the IMF and World Bank's reforms as key steps toward more adaptive and responsive financial support. #AlUlaCEME2025pic.twitter.com/fAJGhps8oj
— AlUla Conference for Emerging Market Economies (@AlUlaCEME) February 16, 2025
These initiatives also aim to strengthen non-energy sectors, which include tourism, hospitality, manufacturing, and technology.
“While we build the diversification, it is very important to have a long-term view of how we see things change in terms of revenue and expenditure. The fiscal policy framework in Qatar builds different scenarios for revenue. We build discipline around the spending so the spending goes to the right places. We make sure that surpluses go in the right direction,” said Al-Kuwari.
He added: “Surplus goes to the Qatar Investment Authority because it is Qatar’s revenue diversification engine. A part of the surplus also goes to the shock absorption buffer by enhancing the Qatar Central Bank reserves. Part of it is also reinvested in the economy itself to achieve diversification.”
A panel discussion was held during the AlUla Conference for Emerging Market Economies on ‘Emerging Markets: Policy Challenges Amid Structural Shifts in the World Economy.’ AN Photo
According to the minister, countries including the Kingdom, the UAE, Bahrain, Kuwait, and Oman are all diversifying their economies effectively.
“Saudi, UAE, Bahrain, Kuwait, Oman everyone is working together. It is a healthy competition. We are also complementing each other,” the minister said.
He also said that Qatar’s economic diversification is based on four sectors, including technology, low-carbon manufacturing, logistics, and tourism, adding that the nation has already started seeing the results.
“In tourism, during the World Cup in 2022, we received 2.3 million visitors. In 2023, the year after the World Cup, visitors increased to 4 million, and in 2024, we welcomed 4 million,” said Al-Kuwari. The Qatari minister also said his country seeks to increase the production of liquefied natural gas by 80 percent in a phased manner by 2030, and it will help ensure a sufficient energy supply in the world.
The Dean of the School of Economics and Business at the University of Chile, Prof. José De Gregorio sheds light on the successful policy responses from emerging markets during the last two global economic crises.#AlUlaCEME2025pic.twitter.com/Nh1N1W7nkQ
— AlUla Conference for Emerging Market Economies (@AlUlaCEME) February 16, 2025
During the event, which was held in the historic city of AlUla and runs from Feb. 16— 17, Jin Liqun, president and chairman of the Asian Infrastructure Investment Bank, said the entity is closely cooperating with other multilateral development banks to assist the funding needs in emerging economies.
“We do not work alone, as a new institution, we work with our peer institutions, and other members of the MBD family. We develop our policy lending to support the countries’ efforts toward net zero,” said Liqun.
He added: “We provide local currency financing. We can help countries to avoid currency risks, and also we believe that it is important to introduce climate-resilient debt crisis financing. This provides temporary relief after climate disasters. We have a soft fund window to help reduce the costs of infrastructure investments.”
Jin Liqun, president and chairman of the Asian Infrastructure Investment Bank, speaks during the panel discussion. AN Photo
Liqun further said that the Asian Infrastructure Investment Bank is assisting emerging economies in positioning themselves within the global green economy and accessing its value chains.
“The green transition is a major opportunity for emerging countries, especially countries in the Gulf Cooperation Council regions. This is a great opportunity for GCC countries to develop sustainable and resilient economies,” added Liqun.
The Dean of the School of Economics and Business at the University of Chile, Jose De Gregorio, said emerging markets should continue doing what they are doing now but should also effectively address the potential risks as time progresses.
— AlUla Conference for Emerging Market Economies (@AlUlaCEME) February 16, 2025
“Emerging markets should keep doing things which they are doing now. However, there are risks which we have to take into account and be prepared for. First, fiscal policies are not as strong as they were fifteen years ago. Why? Because we have spent a lot of money during the previous crisis. The second one is the geopolitical thing,” added De Gregorio.
The Governor of the Central Bank of Nigeria, Olayemi Cardoso, said countries should possess a deep knowledge of their economies before making strategic fiscal policy decisions.
“My experience has been that it is important for economies to understand their own economies and not just necessarily go in line with what everybody else is doing,” said Cardoso.
Saudi Arabia’s Northern Borders region holds $1.22tn in mining resources
Updated 16 February 2025
MOHAMMED AL-KINANI
JEDDAH: Saudi Arabia’s Northern Borders region, home to an estimated SR4.6 trillion ($1.22 trillion) in mineral resources, is emerging as a key driver of economic growth and investment, according to the Ministry of Industry and Mineral Resources.
The region is a major hub for phosphate production, a critical component in global food security due to its use in agricultural fertilizers. Mining projects in Waad Al-Shamal, an industrial city dedicated to the sector, have positioned Saudi Arabia among the world’s leading phosphate producers and exporters.
As part of Vision 2030, the Kingdom is accelerating efforts to develop its mining sector and reduce its reliance on oil and gas. The ministry has identified mining as a key pillar of economic transformation, focusing on resource efficiency and attracting both local and international investment.
Jarrah bin Mohammed Al-Jarrah, spokesman for the ministry, said the region contains significant deposits of phosphate, coal, dolomite, limestone, and silica sand. It also has five phosphate ore sites and 29 active mining licenses, including 15 for building material quarries and 14 for mineral exploitation.
Beyond mining, the Northern Borders region is expanding its industrial footprint, with 61 factories operating across Arar, Tarif, and Rafha in sectors such as building materials, food processing, and chemicals, Al-Jarrah said.
The developments come as minister of industry and mineral resources Bandar bin Ibrahim Al-Khorayef began a visit to the region on Feb. 16 to assess industrial and development projects aimed at strengthening its role as a mining hub. His visit aligns with the ministry’s broader strategy to attract investment and position mining as a key sector in Saudi Arabia’s economic diversification.
Saudi Arabia’s mining ambitions have gained significant momentum in recent years. At a meeting in July, Alkhorayef highlighted that the estimated value of the Kingdom’s mineral wealth had surged from $1.3 trillion to $2.5 trillion by early 2024 — a 90 percent increase — driven by government investments in geological surveys, exploration, and private sector participation.
The rise in valuation reflects a more comprehensive understanding of the country’s vast mineral potential, as well as increasing demand for critical minerals needed for global energy transitions.
