Saudi Arabia’s yearly inflation rose slightly to 2% in November, mainly because of higher housing rents
Saudi Arabia’s inflation rate rose slightly to 2% in November, up from 1.9% in October, mainly because of higher housing rental costs, according to official data.
Key Drivers of Inflation
The General Authority for Statistics (GASTAT) reported that housing rents increased by 10.8%, with apartment rents rising even higher at 12.5%. The overall costs in the housing, water, electricity, gas, and fuel category went up by 9.1%, making it the biggest factor behind the inflation rate.
GASTAT explained that rising housing rents have been a major reason for inflation throughout the year.
Other Price Increases
- Personal goods and services increased by 2.7%, with jewelry, watches, and antiques surging 23.7%.
- Food and beverage prices rose slightly by 0.3%, driven by a 1.9% increase in meat and poultry prices.
- Restaurant and hotel prices went up by 1.5%, mainly due to a 5.9% rise in hotel and furnished apartment service prices.
Price Declines in Some Areas
- Transportation costs dropped by 2.5%, due to a 3.9% decrease in vehicle prices.
- Furnishings and home equipment fell by 2.9%, with furniture, carpets, and flooring prices down 4.4%.
- Clothing and footwear prices declined by 2.3%, led by a 4.6% drop in ready-made clothing prices.
Monthly Inflation
In November, consumer prices in Saudi Arabia went up by 0.3% compared to October. This increase was mainly due to a 0.9% rise in the cost of housing, water, electricity, gas, and other fuels, driven by a 1% increase in housing rents.
The cost of personal goods and services also grew by 0.5%, with insurance services rising sharply by 6.5%. Food and beverage prices went up slightly by 0.2%, and the prices for restaurants and hotels also increased by 0.2%.
Recreation and culture, along with tobacco, saw small increases of 0.1%. On the other hand, prices for clothing and footwear, as well as furnishings, fell by 0.3%, while communication and health costs dropped slightly by 0.1%.
Transportation and education costs remained mostly unchanged.
Inflation Outlook
Inflation in Saudi Arabia has stayed low compared to global levels, ranging from 1.5% to 1.9% for most of 2024 and reaching 2% in November. The International Monetary Fund (IMF) expects inflation in Saudi Arabia to stay steady at about 2% in the coming years.
This trend is due to a mix of higher local costs, especially in housing, and global economic factors. Despite this, Saudi Arabia has kept inflation low compared to many other countries.
Rating
This week, Fitch Ratings confirmed Saudi Aramco’s long-term credit ratings for foreign and local currency at A+ with a stable outlook.
Published: 16th December 2024
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