Saudi Arabia records one of the lowest inflation rates in the G20

Consumer prices rose by only 2.9% in the third quarter, says kingdom's Ministry of Economy and Planning

Saudi Arabia's economy is forecast to grow by 7.6 per cent after expanding by 3.2 per cent last year, according to the latest forecast by the International Monetary Fund. Reuters

Saudi Arabia recorded one of the lowest inflation rates among the world’s top 20 economies in the third quarter of 2022 as the country’s economy continues to recover from the coronavirus pandemic, according to a new report.

The consumer price index rose by only 2.9 per cent in the Arab world’s largest economy in the three months to the end of September, the kingdom’s Ministry of Economy and Planning said on Friday.

“Despite the rise in global inflation rates to record levels, a large part of this increase was contained in the kingdom, where the consumer price index rose only by 2.9 per cent … which is one of the lowest rates recorded in the G20 countries,” it said in its quarterly report.

Education, recreation and culture, and food and beverage recorded the highest increase in prices in September compared with the same month last year, while clothing and footwear prices dropped 0.99 per cent annually for the month. Furnishings and household equipment prices rose by 0.66 per cent, the data showed.

Saudi Arabia's economy is forecast to grow 7.6 per cent this year, after expanding 3.2 per cent last year, according to the latest forecast by the International Monetary Fund.

The kingdom, the world's largest exporter of oil, has benefited from the rally of crude prices this year after Brent, the global benchmark for two thirds of the world's oil, rose about 67 per cent in 2021 and gained more than 23 per cent since the start of this year.

Saudi Arabia's economy expanded by 8.6 per cent in the third quarter of 2022 on the back of higher oil prices, according to the flash estimates by the kingdom's General Authority for Statistics last month (Gastat).

The Arab world's largest economy 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’s non-oil economy grew 5.6 per cent in the third quarter, driven by manufacturing, wholesale, retail trade, restaurants and hotels, construction and transport sectors, while the oil economy grew 14.5 per cent during the period, the Gastat report said.

The government revenues in the third quarter increased 24 per cent year-on-year to 301.8bn riyals while the foreign direct investments into the kingdom reached 7.8bn riyals.

Saudi Arabia is taking various measures to attract more investment into the country. Last year, it launched the National Investment Strategy, which seeks to attract 388bn riyals in foreign direct investments annually, according to the state-run Saudi Press Agency.

It also set up a new investment promotion authority to facilitate more regional and international investment into the country.

“Looking ahead, our growth prospects remain strong, and investors should be bullish about the near-term performance of the economy thanks to strong energy prices, non-oil growth, robust trade and the kingdom’s growing ability to attract talent, tourism and investment,” said Faisal Alibrahim, Saudi Arabia’s Minister of Economy and Planning.