By Pesha Magid
RIYADH (Reuters) - Saudi Arabia has begun using data gathered directly from company and investor financial statements to calculate foreign direct investment (FDI) as part of a push to modernize and centralize the kingdom's economic data, a Saudi official told Reuters.
Attracting FDI is a pillar of a vast plan by the kingdom's de facto ruler Crown Prince Mohammed bin Salman to boost non-oil gross domestic product, diversify the Saudi economy and cut its reliance on crude oil exports.
For decades, Saudi Arabia has used central bank estimates to calculate FDI but announced a new system in October.
"By the end of each year we will align actual numbers from financial statements and the estimates by GSTAT (statistics authority) based on surveys and try to compile the final numbers," deputy minister for economic affairs at the Ministry of Investment Saad al-Shahrani said in an interview.
"We looked at more than 100,000 financial statements for the last 10 years.... then we were shocked about the details that we gained," he added.
Shahrani said the central bank only calculated FDI inflows, leading to a 25% overestimation of the cumulative FDI stock.
FDI quarterly statistics were released for the first time on Wednesday, as part of the new process, overseen by the International Monetary Fund (IMF).
The new analysis showed FDI inflows spiking sharply in 2022 to $33 billion, up from a previously estimated $8 billion.
"We had one project which was a deal by Aramco (TADAWUL:2222), the pipeline deal ... that's what made the big jump," Shahrani said.
The majority of FDI inflows came to Saudi Arabia's Eastern oil-producing region in 2022, a report released by the Ministry of Investment on Wednesday showed.
While oil and oil-related projects contributed "big time" to FDI in Saudi Arabia, non-oil investment had also been growing in recent years, said Shahrani.
In 2021, the kingdom set a target of reaching $100 billion in FDI by 2030. Net inflows in the first nine months of 2023 were $8 billion.
($1 = 3.7500 riyals)