Saudi Arabia’s PIF back in the black in 2023 with $36.81b

Improvement in investment and non-investment activities across a diverse range of sectors cited as reasons

RIYADH: Saudi Arabia’s Public Investment Fund (PIF) is back in the black in 2023 with a swing to a staggering profit of 138.1 billion riyals ($36.81) billion. The PIF has firmly established itself as a formidable player on the international stage, shattering the previous year′s loss of $15.6 billion and more than doubling its total revenues to $88.3 billion.

This remarkable turnaround can be attributed to a confluence of factors, including an improvement in both investment and non-investment activities across a diverse range of sectors, from banking and telecommunications to gaming.

The increased dividends generated by the PIF’s expansive portfolio have also played a pivotal role in this financial resurgence, further solidifying the fund’s position as a key driver of Saudi Arabia’s economic agenda.

Vision 2030

At the heart of this evolution lies the ambitious “Vision 2030” plan, spearheaded by Crown Prince Mohammed bin Salman, the kingdom’s de facto ruler. The transformative blueprint envisions a future where Saudi Arabia’s economy is less reliant on its oil reserves and more diversified, with the PIF serving as the chosen vehicle to channel hundreds of billions of dollars into a myriad of projects.

Chief among these initiatives is the colossal NEOM project, a sprawling urban and industrial development nearly the size of Belgium, set to be built along the Red Sea coast.

With a portfolio encompassing a diverse range of assets, from date farms to multinational conglomerates, the PIF’s sources of funding are equally diverse, drawing from retained earnings, capital injections from the government, the transfer of government assets, and an array of loans and debt instruments. This multifaceted approach to capital generation and deployment underscores the fund’s strategic vision and its commitment to driving sustainable economic growth.

The PIF’s remarkable turnaround in 2023 has not only cemented its position as a dominant force in the global financial landscape but has also highlighted the broader implications for Saudi Arabia’s economic transformation.

 As the kingdom continues to wean itself off its reliance on oil, the PIF’s success serves as a powerful testament to the efficacy of its diversification efforts and the potential for sovereign wealth funds to catalyze sweeping economic change.