Strategic impact of the public investment fund on Saudi Arabia’s financial performance

Type of the article: Research paperAbstractThe Public Investment Fund (PIF), Saudi Arabia, founded in 1971, at the forefront of reshaping Saudi Arabia’s economic flow through its Vision 2030, diversification from crude oil revenues and towards more sustainable growth. The study attempts to quantify the impact of PIF on the financial performance of the country, looking into key economic indicators such as GDP growth, foreign direct investment (FDI), and stock market stability. The study adopts a mixed-methods approach and uses data from 2018 to 2023. The dataset comprises annual economic reports from the Saudi Central Bank, General Authority for Statistics, investment data from the Public Investment Fund’s, and financial market data from Tadawul Stock Exchange. Analysis reveals a statistically significant positive correlation (R = 0.46, p < 0.05) between increases in PIF’s Assets under Management (AUM) and national GDP growth, suggesting that strategic public investments strongly contribute to macroeconomic expansion. Strategic PIF investments resulted in a notable 45% rise in FDI specifically into the non-oil sector, alongside a 30% increase in domestic job creation between 2018 and 2023. Additionally, stock market stability significantly improved during the study period, as evidenced by reduced volatility and a sustained upward trend in the Tadawul All Share Index (TASI), reflecting strengthened investor confidence driven by PIF initiatives. These findings underscore the strategic role of PIF in catalyzing Saudi Arabia’s transition toward a diversified and sustainable economy, supporting green energy initiatives, population-driven economic growth, and substantial progress in national mega-projects.