Saudi Arabia’s annual inflation rate accelerated to a 13-month high of 2.7 percent in July, up from 2.3 percent in June, according to recent data released by the General Authority for Statistics.
The Kingdom’s Consumer Price Index exceeded Bloomberg’s forecasts and increased by 0.1 percentage points.
This is the second month in a row that the annual inflation rate has risen as May recorded 2.24 percent growth.
The rate of annual growth in the general CPI at 2.67 percent is the highest in the past 13 months. The uppermost level prior to this month was in June 2021 when Saudi annual inflation soared to 6.2 percent.
The uptick in the CPI is driven by a rise in food and beverage prices, GASTAT added.
According to the report, food and beverage prices showed an annual increase of 3.9 percent, while meat prices surged by 5.1 percent.
“Food and beverages prices were the main drivers of the inflation rate in July 2022 due to their high relative importance in the Saudi consumer basket with a weight of 18.8 percent,” said GASTAT.
Transport prices increased by 3.6 percent, mainly due to the increase in the purchase of motor cars prices which went up by 4.2 percent.
The GASTAT report further revealed that personal goods and services prices in the Kingdom also increased by 2.1 percent.
Restaurants and hotels prices increased by 6.3 percent, due to the increase in catering services prices, which went up by 6.5 percent, the report added.
The GASTAT data indicated that education prices rose by 5.7 percent in July 2022 compared to the same period a year before.
All expenditure categories saw an increase in their annual price levels except for clothing and footwear which fell by 1.1 percent in July, showed data from GASTAT.
The general month-on-month inflation levels in Saudi Arabia increased by 0.3 percent in July reaching 0.5 percent, according to the GASTAT data.
The monthly CPI was expected to reach 0.4 percent in July, showed the Bloomberg survey, but beat forecasts by a 0.1 percent increase.
MBS’ Other Priorities
Amid this unprecedented inflation levels, Neom appears to be the crown prince’s highest priorities, and as he is devoting immense resources to making it a reality.
MBS was in the early stages of one of the largest and most difficult construction projects in history, which involves turning an expanse of desert the size of Belgium into a high-tech city-region city.
Yet five years into its development, bringing Neom out of the realm of science fiction is proving a formidable challenge—even for a near-absolute ruler with access to a $620 billion sovereign wealth fund.
Meanwhile, the Saudi inflation rates have affected Saudi Arabia’s housing market. Demand is falling sharply. The value of Saudi Arabia’s real estate transactions fell by 19% to SAR 18.84 billion in March-April 2022 (Sha’ban 1443 Hijri year), compared to SAR 23.29 billion in the same period last year, Ministry of Justice data showed. The real estate deals dropped by 22%, or SAR 5.22 billion, month-on-month (MoM).
