Research firm: Capital spending in the Kingdom fell 19% year-on-year during Q1

Jadwa Investment revealed in its economic report that capital spending in the Kingdom during the first quarter recorded a 19% year-on-year decline, and has been declining since the second quarter of 2024.

Jadwa explained that although it expects capital spending to recover during the rest of the year from its reduced level during the first quarter, its levels will be lower than in 2024 and within the budgeted level.

In a related context, Jadwa expected that investment-related spending (capital spending and goods and services) will experience some decline, indicating that this decline will be a decline from high levels.

The report explained that during the years 2022-2024, capital spending witnessed a sharp increase, along with spending on the item (goods and services), which is partially related to it, due to the need for additional inputs in addition to capital spending. Jadwa added that data for the first quarter of 2025 showed a decline in both capital expenditure and spending on goods and services by about a third compared to their levels in the fourth quarter of 2024. It indicated that although spending on goods and services was higher year-on-year during the first quarter, it was within budget on a pro rata basis. It noted that total expenditures in the first quarter grew by 5% year-on-year, representing 25% of the annual budgeted expenditure on a simple pro rata basis, with spending aligned with the budget. It explained that spending typically increases at the end of the year, so actual spending is likely to be higher than the budgeted expenditure, which targets a decrease in total spending in 2025.