FDI inflows into Saudi fell 56% y-o-y to USD 12.3 bn in 2023, bogged down in part by cross-border M&A transactions, which saw net outflows, according to the UN Trade and Development’s (UNCTAD) latest World Investment Report (pdf) and its regional trends breakdown (pdf).

FDI outflows from the Kingdom also fell 40.4% y-o-y, coming in at USD 16.1 bn in 2023, the report says. Saudi remains among the 20 economies with the highest value of FDI outflows, sitting just above Denmark (USD 15 bn in outflows) and India USD 13 bn in outflows).

IN CONTEXT- Direct investment into Saudi grew 32% y-o-y in 4Q 2023 to USD 5.1 bn, according to Saudi Invest’s Economic and Investment Monitor. From 2017-2022, Saudi averaged USD 17 bn in FDI inflows, according to Bloomberg.

How did others in the region do last year?

  • The UAE saw its inflows grow 35% y-o-y to USD 30.7 bn, while its outflows fell 10% to USD 22.3 bn;
  • Egypt’s FDI inflows fell by 13.7% y-o-y to USD 9.8 bn, while outflows increased 14% to USD 390 mn;
  • Inflows for Bahrain grew 2.5x y-o-y to USD 6.8 bn, outflows were down 42.9% to USD 1.1 bn;
  • Kuwait’s inflows almost tripled y-o-y to USD 2.1 bn, as its outflows fell 54.5% to USD 11.2 bn;
  • Morocco’s inflows decreased 51.5% y-o-y to USD 1.1 bn, while outflows increased 30.4% y-o-y to USD 836 mn;
  • Qatar recorded negative inflows of USD 474 mn from inflows of USD 76 mn a year earlier. Meanwhile, it recorded negative outflows of USD 191 mn.

A look at Asia: While FDI flows to developing Asia fell 4.7% y-o-y to USD 621 bn in 2023, it remained the largest recipient of FDI globally accounting for 50% of total global inflows. FDI inflows to West Asia — which includes Saudi, UAE and Turkey — fell 9% y-o-y during the period on the back of lower M&A sales. However, the region saw more greenfield projects and international project finance agreements last year in comparison with others in Asia. The number of international project agreements in the region nearly doubled to 94 in 2023 at a value of USD 57 bn.

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