Riyadh, Saudi Arabia, Building on Saudi Arabia’s unparalleled economic transformation, the Kingdom has been working across government and in consultation with the IMF to improve the quality and transparency of its FDI statistics to bring them into line with world’s best practice when they are published this year.
Vision 2030, Saudi Arabia’s economic growth and diversification blueprint, outlined that the government would “adopt leading international standards and administrative best practices, to reach the highest levels of transparency and governance.”
True to that mission, the Ministry of Investment of Saudi Arabia (MISA), the General Authority for Statistics (GASTAT), and the Central Bank of Saudi Arabia (SAMA), have worked over the last two years to improve the quality and transparency of the Kingdom’s FDI statistics along with the technical assistance of the IMF.
The new methodology, endorsed by the IMF, uses surveys to produce quarterly numbers while an analysis of financial statements is used to produce highly accurate yearly numbers with 20 FDI indicators covering countries, sectors and administrative regions.
His Excellency the Minister of Investment Khalid Al Falih said the new methodology was just one part of the continuing reforms and upgrades to data accuracy and transparency taking place in Saudi Arabia, while the economy and investment ecosystem continues to mature off the back of Vision 2030 and the National Investment Strategy (NIS).
“Saudi Arabia offers investors access to the fast-growing Saudi market, the largest in the region, and provides an excellent platform to access regional growth opportunities across the Middle East and beyond.
“Improving the transparency and quality of the Kingdom’s FDI statistics, investors will be able to make much more confident and informed decisions, while the Kingdom itself will be able to adapt its policies to attract even more investment.
“The Kingdom’s performance in capital formation and attracting FDI has steadily improved as the data will validate, cementing the Kingdom’s position as a top investment destination.
“And we are working every day to attract investors from all over the world to Saudi Arabia, whether it’s been through the launch of the National Investment Strategy (NIS), the development of Special Economic Zones, the Supply Chain Resilience Initiative (GSCRI), or our Giga Projects,” Al Falih said.
The President of GASTAT Dr. Fahad Abdullah Aldossari, confirmed the FDI methodology was approved after technical assistance from the IMF, according to the best international practices. The methodology aligns with the IMF’s Balance of Payments Manual. He also stated that the methodology will contribute to improving the accuracy, and covering more FDI indicators.
“FDI statistics will help decision-makers in designing policies, in order to create an attractive investment ecosystem and highlight the investment opportunities in the Kingdom,” the President said.
“Through this methodology, GASTAT seeks to diversify data sources, increase reliability on sources, and provide more detailed statistics, such as the FDI stock and inflows based on economic activity and countries investing in the Kingdom. Moreover, GASTAT provides FDI data using quarterly surveys.”
“This comes as part of GASTAT’s efforts to provide accurate and comprehensive statistical data with high quality and transparency.”
MISA Deputy Minister for Economic Affairs and Investment Studies Dr Saad Alshahrani said access to high-accuracy data is crucial not only to measure the extent of progress and development but also to improve and monitor the local economy and performance of Saudi investment.
“Over the last two years, MISA has painstakingly gone back through the individual financial statements of thousands of businesses.
“In all some 70,000 separate data files have been created for the update which will help to determine investment priorities and to monitor the sectoral and source countries performance,” Dr. Alshahrani said.
In its recent Article IV Consultation, the IMF expressed its support for the country's continuous efforts to improve the compilation of FDI data through collaboration with the Fund.
“Staff welcomes ongoing plans to refine FDI data compilation based on recent statistical manuals and guides, with help from Fund TA [Technical Assistance],” the report stated.
Further, UNCTAD has confirmed that the new methodology follows international standards in accordance with the Balance of Payments Manual by the IMF, while the World Bank supports the recommendations made by the IMF in its technical assistance report on Saudi Arabia.
Source: Saudi Press Agency