- Saudi Arabia’s annual inflation rate eased to 3% in October from 3.1% in September, with higher food prices driving the latest price rise, the General Authority for Statistics reported on Tuesday. The consumer price index for October was 0.2% higher than the month before.
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The report added that the high relative importance of the food and beverage category in the Saudi consumer basket, along with its inflated costs, make it the primary driver of inflation last month. The housing rental market jumped 3.7% in October, alongside a 3.3% rise in water, electricity, gas and other fuels. Personal goods and services increased by 0.9%, and the rental prices of wedding halls jumped 8.5%.
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The GASTAT report showed that month-on-month inflation was mainly affected by the increase in actual rentals for housing, catering services, education prices, communication prices, as well as transport and health prices.
Why it matters
While most Gulf central banks have raised interest rates in line with the Federal Reserve’s moves, governments in the region have also taken measures to limit the impact of rising prices, such as capping fuel prices. Rising business activity buoyed by strong demand in the non-oil sector is also driving confidence in Saudi Arabia’s economic outlook. The kingdom’s non-oil private sector grew strongly in October, according to the most recent Purchasing Managers’ Index.
