Saudi Arabia’s inflation edges up to 3.3 per cent in December
- 15 Jan 2023
Saudi Arabia’s annual inflation rate ticked up to 3.3 per cent in December from 2.9 per cent in November, government data showed on Sunday, with price rises again driven mainly by housing costs.
Prices rose 0.3 per cent month on month in December, compared with a 0.1 per cent monthly rise in November, Saudi Arabia’s General Authority for Statistics said.
Housing, water, electricity, gas and other fuels, with a 25.5 per cent weight of the consumer basket, rose 5.9 per cent from a year earlier and were 0.9 per cent higher compared with November.
The statistics authority said the rise was “as a result of the increase in actual rentals for housing by 1.1 per cent.”
Food and beverage prices, which were the main driver of inflation during much of 2022, fell 0.1 per cent on a monthly basis, though they were still up 4.2 per cent compared to December 2021.
“The annual consumer price index for 2022 increased by 2.5 per cent compared to 2021, mainly influenced by the rise in food and beverages prices by 3.7 per cent and transport prices by 4.1 per cent, due to their weight in the index,” the General Authority for Statistics said in a separate report.
The housing category rose 1.8 per cent in 2022, “mainly resulting from the increase in actual rentals for housing by 2.0 per cent,” the authority said.
The finance ministry, in its 2023 budget statement, had said it expected an average inflation rate of 2.6 per cent at the end of 2022.
Meanwhile earlier in December the Saudi Arabia PMI from Riyad Bank pointed to another robust improvement in business conditions across the non-oil economy in November, underscored by a sharp expansion in business activity that was the fastest since August 2015.
New order growth accelerated to a 14-month high, leading to a sharper rise in purchasing activity, but falling backlogs and strong capacity levels meant that job creation remained mild.
At the same time, non-oil businesses saw a pick up in inflationary pressures, as average input costs and prices charged rose to the greatest degree since July.
The headline figure is the seasonally adjusted Riyad Bank Saudi Arabia Purchasing Managers’ Index (PMI). The PMI is a weighted average of the following five indices: New Orders (30 per cent), Output (25 per cent), Employment (20 per cent), Suppliers’ Delivery Times (15 per cent) and Stocks of Purchases (10 per cent). For the PMI calculation the Suppliers’ Delivery Times Index is inverted so that it moves in a comparable direction to the other indices.
The headline index increased for the second consecutive month in November, rising to 58.5 from 57.2 in October, and remained firmly above the 50.0 mark that separates growth from contraction.
The reading was also the highest seen since September 2021 and above the long-run series average of 56.8. Non-oil companies continued to register a sharp uplift in new business in November, which survey panellists attributed to improving economic conditions, rising client demand and increased investment.
