Rising Fuel Prices Push Saudi Inflation Rate Up

Annual inflation rate in Saudi Arabia hit 1.1% in November, up from 0.8% in the previous month, according to Gastat. This is the highest level since June and the third month in a row in which inflation rate rose. The jump in consumer prices was driven by higher transport costs, which increased 5.7% in November compared to the same month last year. Transportation makes up 13% of the overall index. Gastat said soaring fuel prices, rising 47.9%, fueled the inflationary pressures in the sector. In addition, food prices played a major role in the hike prices, climbing 1.7% with vegetable prices surging 7%. Education prices also went up by 4.8% while prices of restaurants and hotels were 1.8% higher when compared to last year, which was due to a rise in catering services prices.

Prices of clothing and footwear were 1.8% cheaper in November compared to a year earlier. Prices of utilities such as housing, water, electricity, gas and other fuels also experienced a 1.6% decline. Actual rentals for housing dropped by 2%. On a monthly basis, consumer prices edged up 0.2% in November. Prices of utilities were unchanged while transport prices slightly increased by 0.3%. Costs of personal goods and services went up by a monthly 1.4%, the highest month-on-month rise among other groups. Saudi Arabia has said in its 2022 budget that the inflation rate this year is expected to rise to 3.3% on average, due to the fading of the base effect of a tripling of value added tax in July last the year. It forecast inflation to rise to 1.3% on average next year.