Saudi Arabia’s annual inflation rate ticked up to 3.3% in December, the fastest pace in 18 months, driven by mounting costs for housing, energy and food, new reports by Bloomberg and Reuters revealed this week.
According to the sources, Saudi Arabia’s inflation rate in December is the highest since June 2021, when it hit 6.2 percent.
Reuters quoted Saudi Arabia’s General Authority for Statistics as saying prices rose 0.3% month on month in December, compared with a 0.1% monthly rise in November.
Housing, water, electricity, gas and other fuels, with a 25.5% weight of the consumer basket, rose 5.9% from a year earlier and were 0.9% higher compared with November.
Global food prices broke a new record last year due to the Covid outbreak and Ukraine’s war.
The Saudi Central Bank, also known as SAMA, lifted its repo and reverse repo rates by 75 bps to 3.75% and 3.25%, respectively, in an attempt to control inflation rates.
Bloomberg has warned in its report that Saudi Arabia is facing an unprecedented increase in inflation rates. The Kingdom is not immune to these trends, it writes.
Saudi Arabia’s private sector growth fell to its lowest level in at least three months, it added.
MBS cannot attract foreign investment
As countries and companies rush to get their hands on critical raw materials to bolster supply chains and deal with a rocky energy transition, Saudi Arabia is struggling to secure foreign direct investment.
Bin Salman’s serious human violations and grasp of power since emerging as the main power broker in Saudi Arabia has repeatedly made headlines.
Experts have warned that the sharp decline in foreign investments is a real disaster that proves that foreign investors do not trust the projects launched by the Saudi crown prince Mohammed bin Salman (MBS) including NEOM and The Line.
