Saudi Arabia’s net foreign direct investment (FDI) decreased by 7% in the first quarter of 2025 compared to the previous quarter, according to government data released on Sunday. The kingdom attracted 22.2 billion riyals ($5.92 billion) in FDI during the three months ending March 31, down from 24 billion riyals ($6.40 billion) in the last quarter of 2024.

Despite this decline, net FDI was up by 44% compared to the same quarter in the previous year, when the kingdom received 15.5 billion riyals ($4.13 billion), as reported by the General Authority of Statistics. Raising FDI is a crucial aspect of Saudi Arabia’s Vision 2030 economic transformation program, which aims to reduce the country’s reliance on oil, expand the private sector, and create job opportunities.

The kingdom has set an ambitious target of attracting $100 billion in FDI by 2030, with significant investments in large development initiatives known as “giga projects.” Additionally, Saudi Arabia is focusing on expanding sectors such as sports, tourism, and entertainment. However, FDI levels remain significantly below this goal.

Foreign investors often view Saudi Arabia more as a source of capital rather than a favorable destination for investment. Sources informed Reuters that navigating the kingdom’s business environment can be challenging for foreign investors since the FDI goal was announced in 2021. Furthermore, a recent report from the International Monetary Fund (IMF) projected that Saudi Arabia would face a fiscal deficit of about $27 billion this year, primarily financed through borrowing.

Although Saudi Arabia was the largest emerging market dollar debt issuer last year, the IMF indicated that the country has the capacity to continue borrowing, as its net debt stands at approximately 17% of GDP, making it one of the least indebted nations globally. In an effort to attract more foreign investment, Riyadh has implemented measures requiring companies seeking state contracts to establish their regional headquarters in Saudi Arabia. The government also plans to revise existing investment laws to enhance transparency and ensure equal treatment for both local and foreign investors.