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.
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.
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.