Saudi fixed capital investment rises over 5% to $95.4bn in Q1

Saudi Arabia attracted SR358.2 billion ($95.4 billion) in fixed capital investment in the first quarter of 2026, a 5.1 percent increase year‑on‑year, driven by continued government and private‑sector funding, official economic indicators showed. Non‑government sources accounted for nearly 89 percent of gross fixed capital formation (GFCF), highlighting the private sector’s dominant role in the quarter.

“Gross Fixed Capital Formation grew by approximately 5.1 percent in Q1 2026. This increase is attributed to a 1.3 percent (increase) in GFCF from the non‑government sector, which accounted for 89 percent of GFCF during the same period,” the Ministry of Investment said in its May 2026 economic indicators report.

The ministry’s breakdown shows non‑government GFCF reached SR319.9 billion in Q1, up 1.3 percent from a year earlier, while government GFCF surged 54 percent to SR38.3 billion. The rebound in investment follows a 6 percent decline in gross fixed capital formation in 2025, signaling a return to growth amid a broader investment cycle tied to Vision 2030 projects, infrastructure spending and private‑sector expansion.

Context and sector dynamics

• Real GDP rose 3 percent in Q1 2026 compared with Q1 2025, GASTAT data show, with oil and non‑oil activities each expanding by 2.9 percent and government activities increasing 1.5 percent.
• Nominal GDP growth was driven primarily by a 12.3 percent increase in oil activities during the quarter.
• The non‑oil, non‑government component — the main element of private‑sector fixed investment — dipped slightly, contracting 0.2 percent in Q1.
• Other indicators presented mixed momentum: the consumer price index rose 1.7 percent year‑on‑year in April; point‑of‑sale transactions climbed 11.8 percent; and the purchasing managers’ index (PMI) for the non‑oil private sector fell 5.4 percent year‑on‑year in May to 52.8 points, still above the 50‑point threshold that signals month‑on‑month improvement.
• Energy market developments influenced the backdrop: Brent crude averaged $102.5 per barrel in April, up 54.2 percent year‑on‑year, while reported Saudi oil production declined 24.8 percent over the same period.

The International Monetary Fund earlier noted the economy entered 2026 with “strong momentum,” supported by robust non‑oil activity and domestic demand, even as it expects growth to moderate through the year. The ministry highlighted investment‑linked imports and long‑term capital deployment as salient features of the medium‑term outlook.

Outlook

With government GFCF jumping 54 percent and the private sector still supplying nearly nine of every ten riyals invested, policymakers are likely to view the Q1 rebound as validation of ongoing fiscal and project spending. However, the slight contraction in non‑oil, non‑government fixed investment and the PMI’s year‑on‑year decline underscore uneven momentum within the private sector.

Going forward, the trajectory of GFCF will depend on the pace of Vision 2030 project execution, global oil market volatility and domestic demand. Continued monitoring of PMI trends, consumer spending and import‑linked investment flows will be key to assessing whether Q1’s return to growth can be sustained through 2026.