Saudi minister asserts economic resilience to investors at FII conference

Saudi Arabia’s investment minister sought to assure investors on Tuesday the kingdom’s economy, the Middle East’s largest, was an attractive place for investors amid a year of regional conflict.

Khalid Al Falih, speaking at Saudi Arabia’s annual government-organised investment conference in Riyadh, listed off what he said were positive signs that a major state-driven transformation of the economy away from oil was working.

“The tailwinds are much stronger than the headwinds,” he said at the Future Investment Initiative (FII) summit that included executives from top global banks and investment funds.

Saudi Arabia announced its Vision 2030 plan in 2016, which involves hundreds of billions of dollars of investments to wean the country’s economy off oil.

He said the non-oil economy had been “consistently” growing at a rate of 4 per cent to 5 per cent since 2017, including last year and this year.

Watch Day 2 of #FII8 🔴LIVE on FII Institute TV!
Join the #Movement online and tune in from anywhere in the world as our stellar lineup of speakers explores emerging avenues set to reshape the future of #investment and #economies.🔗 https://t.co/DxADh2qK3v pic.twitter.com/ij4UW2HDAA

— FII Institute (@FIIKSA) October 30, 2024

“The list goes on,” Al Falih said, adding that 540 companies had committed to having a regional headquarters in the kingdom, which was ahead of the government’s target of 500 by 2030.

Saudi Arabia’s economy is highly dependent on oil revenues, and the International Monetary Fund (IMF) this month further lowered its outlook for growth of its total economy to 1.5 per cent due to the government’s policy to maintain lower oil production.

It estimates growth will accelerate to 4.6 per cent next year.

The government has projected that it will post a fiscal deficit of $32bn (SAR118bn) this year, equal to 2.9 per cent of GDP, as it funds the economic transformation.

The government’s massive infrastructure projects, including building entirely new urban and industrial areas, also need foreign investment.

Al Falih said that the geopolitical situation in the Middle East was “concerning” and the human aspect was “tragic” in comments about the region and Europe but without mentioning any one conflict.

“The economy of Saudi Arabia and Vision 2030 is navigating these geopolitical and macroeconomic and global challenges, including trade tensions and political conflicts, extremely well,” Al Falih said.

Read: Saudi wealth fund PIF tells FII gathering it will cut overseas investments