The Ministry of Investment of Saudi Arabia (MISA) has announced in its new Investment Highlights Summer 2020 report that 506 new international companies were granted investor licenses during the first half (H1) of the year.

The figures came after 20% year-on-year growth in Q1 was followed by a 47% year-on-year decline in the second quarter of the year (Q2) as the global economy was severely impacted by the coronavirus pandemic in April and May.

However, the number of investor licences accelerated in June –with the month accounting for nearly half of all licences issued in the quarter and the number of licences issued 23% higher than in June 2019.

Other recent data also pointed to an increase in economic activity towards the end of Q2 – suggesting that the economy may be experiencing significant catch-up growth as the Kingdom cautiously lifts some lockdown measures.

The report notes that figures from the Saudi Arabian Monetary Authority highlighted that point of sale transactions saw a positive 78.5% year-on-year jump in June to a record level of $9.9 billion, following sharp declines in May and April. Likewise, data released by the Ministry of Industry and Minerals Resources showed that investments by newly licensed industrial factories amounted to $581 million in June, following a sharp slowdown in April and May.

Saudi Arabia’s new mining law will bring the regulatory environment of the mining sector in line with international standards, helping to unlock a market which has an estimated $1.3 trillion in untapped minerals.

Khalid Al Falih, Minister of Investment of Saudi Arabia, said: “We are encouraged by the resilience demonstrated by the Saudi economy in the first half of 2020. This has undoubtedly been a year of unprecedented challenges – and the path of the economy in the near term will depend on the virus. However, we have seen clearly that the government’s decisive response to the pandemic has helped to support investors through this difficult time.”

“Furthermore, the positive economic data for June give us confidence that the Saudi economy is rebounding from the impact of COVID-19 and that growth in foreign investment will begin to regain the strong momentum we have seen in recent years.

“The opportunity in Saudi Arabia has not changed – this is still a G20 economy that is undergoing a fundamental transformation. Today’s report highlights a number of tangible examples of how the widespread reforms being undertaken as part of Vision 2030 are unlocking significant opportunities. We look forward to welcoming more investors to share these opportunities as the situation normalises,” he added.

Major sources of new foreign investment at the beginning of 2020 continued to represent a diverse range of global markets and sectors. As in 2019, growth in the first half came from long-standing strategic partners such as the US and the UK (with 54 US companies and 47 UK companies awarded licenses in H1 2020) and leading growth markets such as India (with 49 companies)

MISA’s Emerging Sectors, which include entrepreneurship, education, financial services, and housing, continued to see the highest number of new foreign investment projects in Q2, followed by the industrial and manufacturing and ICT sectors. – TradeArabia News Service