Inflation in Saudi Arabia climbed to 3 per cent annually in August on rising food and beverage prices, as well as increasing transport costs.
The Consumer Price Index for August edged up from the 2.7 per cent increase recorded in July and June's 2.3 per cent, Saudi Arabia’s General Authority for Statistics (Gastat) said on Thursday.
“The main drivers of CPI inflation in August are the higher price of food and beverages [up 4 per cent] and transport [up 4 per cent],” Gastat said in its monthly CPI update.
Prices in the food and beverage sector — which makes up 18.8 per cent of the Saudi consumer basket — were driven up by a 6.7 per cent increase in the cost of meat.
Meanwhile, a 4.7 per cent rise in the prices of motor cars pushed up transport prices, the report said.
Housing, water, electricity, gas and other fuel prices also increased by 2.5 per cent on the back of a 2.7 per cent rise in residential rents.
Prices of personal goods and services increased by 2.1 per cent while restaurants and hotel prices rose 7.3 per cent and education costs were up 5.7 per cent annually last month.
Clothing and footwear prices decreased by 0.9 per cent, due to a 1.4 per cent drop in garment rates.
Compared with July 2022, consumer prices increased slightly by 0.4 per cent last month, mainly due to rising food and beverage prices, the report said.
Inflation has soared globally on rising food and commodity prices after Russia's invasion of Ukraine in February.
Worldwide, inflation is forecast at 5.7 per cent in advanced economies and 8.7 per cent in emerging market and developing economies this year, according to the International Monetary Fund.
However, the IMF expects inflation in Saudi Arabia to remain contained at 2.8 per cent in 2022 as its central bank tightens monetary policy in line with the US Federal Reserve.
Saudi Arabia has also taken steps to ease inflationary pressures in the country. It allocated 20 billion Saudi riyals ($5.3bn) in July to dampen the effects of the increase in prices on its citizens.
The kingdom is distributing 10.4bn riyals through direct cash transfers to support social security beneficiaries. The rest of the money will be used to increase strategic stocks of basic commodities and ensure their supply, the Saudi Press Agency reported, citing a royal decree issued by King Salman.
The impact of inflation is also being balanced by a rise in per capita income amid improving business conditions in the country.
Gross domestic product per capita in the kingdom rose 44.6 per cent on an annual basis in the second quarter of the year to 29,819 riyals, a recent report by Gastat found.
Saudi Arabia's economy rebounded strongly from the coronavirus-induced slowdown, with the pace of momentum picking up this year on the back of a steep rise in oil prices.
The kingdom's economy grew by 12.2 per cent in the second quarter, the fastest expansion in more than a decade, Gastat said last week.
“All economic activities showed positive annual growth in the second quarter of 2022,” it said.
Saudi Arabia’s GDP is forecast to expand by 7.6 per cent this year, from 3.2 per cent in 2021, the IMF said in its World Economic Outlook update in July.
Non-oil growth will increase to 4.2 per cent in 2022 before returning to its medium-term potential of 4 per cent.
The kingdom could be one of the world’s fastest-growing economies this year, the fund said in August.
UK's plans to cut net migration
Under the UK government’s proposals, migrants will have to spend 10 years in the UK before being able to apply for citizenship.
Skilled worker visas will require a university degree, and there will be tighter restrictions on recruitment for jobs with skills shortages.
But what are described as "high-contributing" individuals such as doctors and nurses could be fast-tracked through the system.
Language requirements will be increased for all immigration routes to ensure a higher level of English.
Rules will also be laid out for adult dependants, meaning they will have to demonstrate a basic understanding of the language.
The plans also call for stricter tests for colleges and universities offering places to foreign students and a reduction in the time graduates can remain in the UK after their studies from two years to 18 months.
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
Race 3
Produced: Salman Khan Films and Tips Films
Director: Remo D’Souza
Cast: Salman Khan, Anil Kapoor, Jacqueline Fernandez, Bobby Deol, Daisy Shah, Saqib Salem
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Fuel economy, combined 10.6L / 100km
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How to apply for a drone permit
- Individuals must register on UAE Drone app or website using their UAE Pass
- Add all their personal details, including name, nationality, passport number, Emiratis ID, email and phone number
- Upload the training certificate from a centre accredited by the GCAA
- Submit their request
What are the regulations?
- Fly it within visual line of sight
- Never over populated areas
- Ensure maximum flying height of 400 feet (122 metres) above ground level is not crossed
- Users must avoid flying over restricted areas listed on the UAE Drone app
- Only fly the drone during the day, and never at night
- Should have a live feed of the drone flight
- Drones must weigh 5 kg or less
UAE currency: the story behind the money in your pockets
