Saudi Arabia’s foreign direct investment (FDI) inflows have dropped for the third consecutive year in 2024, indicating ongoing challenges in attracting foreign investors. The kingdom saw a year-on-year decline of 19%, bringing total inflows down to $20.7 billion, marking the lowest level since 2020. This information comes from an annual government report that monitors the country’s progress in economic diversification.

The preliminary figures suggest that Saudi Arabia has likely fallen short of its annual FDI target of $29 billion. In contrast, the kingdom had successfully met its goals in the previous three years. Officials have attributed the recent slowdown to reduced global liquidity and tighter monetary conditions.

Saudi Arabia is actively seeking more FDI to stimulate growth in new sectors and to help finance Crown Prince Mohammed bin Salman’s ambitious multi-trillion dollar economic overhaul. The kingdom aims for FDI inflows to eventually reach over $100 billion per year by 2030.

Analysts warn that the urgency for increased funding could intensify if global oil prices remain low, potentially leading to deeper government budget deficits and spending cuts. Despite these challenges, Saudi Arabia remains committed to incurring larger fiscal shortfalls as it emphasizes investments in its economic diversification strategy, known as Vision 2030.

As part of its transformation agenda, which is set to enter its final implementation phase in 2026, the country will focus more on private sector investment to reduce reliance on government support. According to the Vision 2030 report, several goals have been met ahead of schedule, including improvements in unemployment rates, female workforce participation, and home ownership. However, efforts to strengthen the non-oil GDP still require significant progress.

Moreover, the Public Investment Fund, responsible for driving Vision 2030, reported that its assets under management grew to about $940 billion in 2024. Looking ahead, Saudi Arabia aims to increase this figure to $2.67 trillion by the beginning of the next decade.