Foreign direct investment into Saudi Arabia fell nearly 20% year on year in the second quarter of 2026, as the regional war disrupted trade and investment activity.
Net FDI inflows declined to SAR19 billion ($5 billion), the lowest level since 2024, according to the General Authority for Statistics.
Despite the drop, Monica Malik, chief economist at Abu Dhabi Commercial Bank, said FDI had held up well. She pointed to possible investments agreed after the conflict began, particularly in logistics and port infrastructure.
Tim Callen, a fellow at the Arab Gulf States Institute in Washington and a former IMF mission chief to Saudi Arabia, said the latest figures remained within the normal fluctuation range for FDI. However, he added that recent trends showed no clear movement towards Saudi Arabia’s $100 billion annual FDI target for 2030.
The conflict has also put planned investment in sectors such as data centres and artificial intelligence infrastructure under pressure, following attacks targeting specific facilities.
Saudi Arabia’s economy shrank for the first time in three years during Q2, partly due to disrupted shipping routes, higher logistics costs and increased government spending on subsidies. The IMF expects real GDP growth of 1.7% in 2026, down from 4.6% in 2025.
Source: AGBI
