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The Kingdom’s inflation shrinks by 1.5% in December.

The Clap

In December, the General Authority for Statistics revealed a decline in the annual inflation rate in the Kingdom to 1.5%, compared to 1.7% in the previous November. This marks the “lowest level” in 23 months.

What

The authority pointed out that prices of housing, water, electricity, gas, and other fuels increased by 7.5%. Additionally, the prices of food and beverages increased by 1.2% in the previous month.

So What

This is important because actual housing rents in Saudi Arabia increased by 9%, influenced by the rise in apartment rents, which increased by 12.1%. This increase had a significant impact on the rise in the annual inflation rate for December due to its substantial weight in the index, accounting for 21%.

Now What

As for the future, the research institution “Capital Economics” expected the annual inflation rate in the Kingdom to decrease to 1.6% in the previous month, with the pace of inflation continuing to decline to 1% by mid-year. The report also mentioned that this trend might experience a

“minor hiccup” in the second half of the year but will be temporary, with inflation slowing down again by 2025.