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Saudi Arabia’s Inflation Rate Eases to 1.9% in December

Saudi Arabia’s annual inflation rate slightly decreased to 1.9% in December 2024, down from 2% in November, according to recent government data. This marks a continuation of the Kingdom’s stable inflation trend, which has ranged between 1.5% and 2% throughout the year.

Housing rents surged by 10.6% in December, with villa rental prices increasing by 9.9%, as reported by the General Authority for Statistics (GASTAT). This rise significantly contributed to the 8.9% increase in the combined housing, water, electricity, gas, and other fuels category.

Global Comparison and Economic Stability

Saudi Arabia’s inflation remains low compared to global levels, supported by effective subsidies on food and fuel. The International Monetary Fund (IMF) projects the Kingdom’s inflation to stabilize around 2% in the medium term, reflecting its resilient economic policies.

Despite inflationary challenges, Saudi Arabia’s non-oil private sector ended 2024 strongly, with sales and business activity reaching a 12-month high. The Riyad Bank Purchasing Managers’ Index (PMI) recorded 58.4 points in December, signaling robust economic recovery.

Future Outlook and Economic Reforms

The Kingdom’s Vision 2030 reforms continue to drive economic diversification, with non-oil GDP expected to grow by over 4% in 2024 and 2025. Rising domestic and international demand, coupled with strategic market expansions, further bolster this growth.

In summary, Saudi Arabia’s slight inflation decline in December reflects its economic resilience, with housing costs remaining a key factor. The Kingdom’s stable inflation and strong private sector performance underscore its progress toward sustainable growth.

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