Saudi Arabia’s Q2 FDI Falls 18% as Kingdom Seeks More Investment

Saudi Arabia’s gross foreign direct investment inflows fell 18% in the second quarter to SAR 22.3 billion, adding pressure to the kingdom’s effort to attract overseas capital for its economic transformation.

The total declined from SAR 27.1 billion in the first quarter and SAR 26.8 billion a year earlier. Net FDI inflows, after accounting for capital leaving the country, fell 15.8% quarter over quarter and 19.5% year over year to SAR 19.1 billion.

FDI outflows totaled SAR 3.2 billion in the second quarter, compared with SAR 4.4 billion in the first quarter and SAR 3.1 billion a year earlier.

Saudi Arabia is using Vision 2030 to diversify its economy beyond oil, expand the private sector and attract foreign investment in manufacturing, technology, health care, logistics and green energy. Its National Investment Strategy sets an annual net FDI target of SAR 388 billion, or approximately $100 billion, by 2030.

The investment slowdown comes as Saudi Arabia faces a wider projected fiscal gap. The 2026 budget deficit is estimated at SAR 245 billion, or 4.9% of gross domestic product, compared with the original estimate of SAR 165 billion, or 3.3% of GDP. The revision reflects higher projected spending rather than lower aggregate revenue.

Regional conflict has disrupted oil flows and shipping routes, increasing pressure on the kingdom’s diversification plans. The FDI figures do not identify the cause of the decline.

Saudi Aramco President and CEO Amin H. Nasser estimated on Oct. 5 that nearly 3 billion barrels of gross oil supply had been lost since the crisis began. He also said less than 6 billion barrels of commercial inventories remained, with most of that volume not practically available.

“The supply resilience cushion is scarily thin,” Nasser said.

Saudi Arabia’s investment strategy now faces the combined challenge of attracting capital at a slower pace while financing higher projected spending and maintaining economic activity during energy and shipping disruptions.