Saudi inflation hits 3.3% in December, highest in 18 months

Inflation in Saudi Arabia rose at its fastest pace in 18 months, driven by mounting costs for housing, energy and food.

The consumer price index climbed an annual 3.3 per cent in December, according to the Saudi General Authority for Statistics. It came after a survey of purchasing managers compiled by S&P Global showed local firms were being forced to raise prices to pass their increased expenses on to customers.

Prices for housing, water, electricity, gas and other fuels in the kingdom rose an annual 5.8 per cent, while food and beverages were up 4.2 per cent. On a monthly basis, inflation was 0.3 per cent.

The annual figure was the highest since June 2021, when the index was still showing the knock-on effects of a tripling in value-added tax the previous year. Still, Saudi inflation remains low compared to the global average of about 9.7 per cent, according to data compiled by Bloomberg.

The Saudi government sees inflation averaging 2.1 per cent in 2023, according to the state budget published last month. Authorities have taken measures to contain growth, including setting a cap on domestic gasoline prices last July.

Read: Saudi jobs growth is strongest in half decade amid business boom