Understanding Saudi Foreign Direct Investment Data

Saudi Arabia published a new data series on inward foreign direct investment in late 2023. This was the result of work to adopt the methodology of the International Monetary Fund’s sixth edition of the “Balance of Payments and International Investment Position Manual” in Saudi Arabia. At that time, annual data for 2004-22 was published. Since then, the General Authority for Statistics and the Ministry of Investment have both been publishing FDI data, which has caused some confusion. Specifically, the General Authority for Statistics publishes a quarterly FDI series, while the Ministry of Investment publishes annual data. The two series, however, do not appear consistent. The annual FDI estimate for 2023 published by the Ministry of Investment was nearly double that of the sum of the General Authority for Statistics quarterly estimates for the year. Further, for 2024, the quarterly General Authority for Statistics data shows a large drop in FDI inflows relative to 2023. This is at odds with other indicators, such as the number of new investment licenses issued. Making sense of the FDI data is important to accurately assess investment trends in Saudi Arabia.  

Sources: General Authority and Statistics; Saudi Arabian Monetary Authority; Ministry of Investment; author calculations.

Sources of FDI Data 

The preliminary quarterly FDI data published by the General Authority for Statistics is based on a survey of foreign companies engaged in investment activities in the kingdom. The data is not comprehensive because the response rate to the survey is low. The annual FDI data comes from a different source. It is calculated by the Ministry of Investment and is based on the year-end financial statements of foreign investment companies operating in the kingdom. This data is more comprehensive and should be more accurate, but unfortunately it is only available on an annual basis and is also published with quite a long lag (data for 2023 was published in October 2024). Once the annual data is available, a revised quarterly data series that is consistent with the annual series is constructed. This revised series replaces the preliminary quarterly data in the balance of payments statistics and elsewhere. 

Preliminary Quarterly Data Is of Little Value 

The bottom line is that the preliminary quarterly data for 2024 is likely underestimated and is therefore of little value in tracking actual FDI inflows. Taking the quarterly data at face value and drawing the conclusion that FDI fell in 2024 is almost certainly wrong. When the Ministry of Investment publishes its annual FDI estimate for 2024, FDI inflows during the year will almost certainly be higher than the quarterly General Authority for Statistics data indicated. It is also likely that FDI inflows in 2024 will be higher than those in 2023.  

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