Saudi Arabia to deepen deficit amid foreign investment shortfall

Saudi Arabia is slipping deeper into deficit spending mode amid slowing growth in revenue from international investment and cutbacks in oil production.

Finance Ministry figures released on Monday show the kingdom’s 2024 deficit growing by almost 50% to $32 billion from projections made last December and reaching 2.9% of GDP.

The forecast buttresses earlier government statements that some of the banner construction projects it plans will have to be slowed down because of revenue shortfalls.

Saudi Arabia is having trouble meeting its goals for foreign direct investment, which at $9.7 billion was roughly the same in the first six months of 2024 as in the same period last year.

The government has set a target of $100 billion in FDI annually by 2030, about three times more than its previous high.

UAE foreign assets pegged at $2.5 trillion by investment chief

A new interview with the UAE’s foreign investment chief puts the country’s current assets abroad, both government and private, at an estimated $2.5 trillion.

Jamal Bin Saif Al Jarwan, Secretary-General of the UAE International Investors Council (UAEIIC), also told the Emirates New Agency WAM that the portfolio is doing well despite economic headwinds.

The UAE’s international investment footprint is topped by sovereign wealth funds holding 72% of the assets, Al Jarwan noted.

Abu Dhabi Investment Authority (ADIA) is the leading foreign investor, followed by Mubadala Investment Co., Investment Corporation of Dubai, Emirates Investment Authority and ADQ.

All told, the UAE owns seven sovereign wealth funds with assets exceeding $2 trillion, trailed by government-owned and quasi-governmental companies with 18%, UAE banks with 2.5% and 7.5% originating from family-owned and private companies.

The “most prominent” deal in 2023 was between U.S. private equity firm Apollo and ADIA to acquire chemicals manufacturer UniVar for $8.1 billion, he said.