Saudi Arabia registers lowest annual inflation rate in nine months

Saudi Arabia’s annual inflation eased last month, marking the lowest rate of price growth since July.

The kingdom’s consumer price index slowed to 2.7 per cent on a monthly basis, from 3 per cent in February, according to Saudi Arabia’s General Authority for Statistics. The headline reading for last month was 2 per cent.

Annually, the latest CPI survey showed that rent was the main driver, with housing costs rising by 8.7 per cent in March, driven by higher apartment rents, which were up 22 per cent. Rent accounts for 21 per cent of the Saudi consumer basket.

Restaurant and hotels prices surged by 6.3 per cent as catering costs increased by an equal amount, while transport prices increased by 1.8 per cent. Education prices also increased 3.1 per cent in March, mainly resulting from the increase in pre-primary and primary education fees by 4.6 per cent, the latest data shows.

Personal goods and services prices, on the other hand, fell by 0.4 per cent, due to the decrease in domestic workers’ recruitment fees. Clothing and footwear prices also declined by 2.2 per cent as garment prices fell during the month. The Arab world’s largest economy continues to recover from the coronavirus-induced slowdown on the back of higher oil prices and its diversification efforts.

Last week, Saudi Arabia launched four special economic zones that will offer companies financial and non-financial incentives as the country seeks to attract more foreign investment and position itself as a global business centre. The zones are focused on the advanced manufacturing, cloud computing, medical technology and maritime sectors.

Saudi Arabia was the fastest growing of the world’s 20 biggest economies last year, according to the Organisation for Economic Co-operation and Development. Meanwhile, food and beverage prices in March fell by 0.4 per cent from February while furnishings, household equipment and maintenance prices declined by 0.5 per cent, the latest data shows.

Housing, water, electricity, gas and other fuels prices, on the other hand, rose by 0.4 per cent from the previous month as a result of the increase in housing costs by 0.4 per cent.

Transport prices increased by 0.2 per cent while personal goods and services prices rose by 0.3 per cent and restaurants and hotels prices by 0.1 per cent during the month.