Saudi Gazette report

RIYADH — The Ministry of Investment issued 506 investment licenses during H1 2020, after registering a 20 percent year-on-year growth in foreign investments in the Kingdom in Q1, followed by a 47 percent year-on-year decline in Q2 2020, largely due to the impact of the COVID-19 pandemic on the global economy, according to the investment update for Q2 2020, Saudi Press Agency (SPA) said Thursday.

The report indicated that the month of June accounted for half of the licenses issued during Q2, despite the decline in growth in licenses during the months of April and May, with an increase of 23 percent compared to June 2019, as the data indicate a recovery in economic activity at the end of Q2, coinciding with the measures taken by the Kingdom to ease the lockdown and a cautious return to economic activities.

In other words, there was a rise in economic activity towards the end of Q2, suggesting that the economy may be experiencing significant catch-up growth as the Kingdom cautiously lifted some of its lockdown measures.

The report indicated that the figures issued by the Saudi Arabian Monetary Authority (SAMA) showed an increase in POS operations, amounting to 78.5 percent for the month of June on an annual basis, as it registered $9.9 billion, after recording a sharp decline in sales operations during April and May, as indicated by data issued by the Ministry of Industry and Mineral Resources that new investments in the industrial sector amounted to $581 million.

The report included an analysis of the opportunities offered to investors in the Kingdom, especially in the promising mining sector, which has a market value of $1.3 trillion, following the issuance of new regulations for mining investment in the Kingdom in line with international standards.

The Minister of Investment Eng. Khalid Al-Falih has stressed that the flexibility demonstrated by the Saudi economy during H1 2020 confirms the resilience of the investment environment in the Kingdom and its safety for the investor, despite the exceptional circumstances the world has gone through this year.

Eng. Al-Falih said: "The positive economic data for the month of June give us confidence in the ability of the Saudi economy to recover from the impacts of the coronavirus pandemic, in addition to the start of the recovery of foreign investments to continue the momentum we have witnessed during the past years."

The Kingdom is undergoing a fundamental economic transformation and enjoys promising investment opportunities and a strong economy. The report sheds light on concrete examples of promising investment opportunities after implementing a series of broad reforms, as part of the Kingdom’s Vision 2030, the minister stressed.

Eng. Al-Falih said, "We are looking forward to welcoming more investors and sharing the available investment opportunities as conditions return to normal."

The report data also revealed the diversity of sources of foreign investment during the year 2020 in the Kingdom from various global markets, as countries with a strategic relations with the Kingdom, such as the United States and Britain, appeared in the list of the most investing countries in the Kingdom, with 54 investment licenses for the US and 47 for Britain.

Countries with emerging markets are among those that have invested most in the Kingdom, an example is India, with 49 investment licenses.

The nascent sectors, which include entrepreneurship, education, financial services and housing, were the most attractive sectors for investment in Q2, followed by the industrial, manufacturing, communications and information technology sectors.