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Saudi inflation at 3% in October 2022 on higher food prices

REUTERS/Fahad Shadeed
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Saudi Arabia’s annual inflation rate eased to three percent in October from 3.1 percent in September, with higher food prices driving the latest price rise, the General Authority for Statistics reported on Tuesday.

The consumer price index for October was 0.2 percent higher than a month before, it added.

Food and beverage prices in October were up 4.4 percent on a year before, due mainly to a 4.6 percent rise in the price of food. The increase had a significant impact on overall inflation because the sector constitutes almost a fifth of the Saudi consumer price basket.

Housing rents increased by 3.7 percent, pushing the overall increase in housing, water, electricity, gas and other fuels to 3.3 percent.

Gulf economies are taking advantage of higher revenue from oil exports this year and resulting fiscal surpluses to boost growth and investments domestically. The IMF estimates Saudi gross domestic product growth at 7.6 percent this year and inflation at 2.7 percent, then 2.2 percent in 2023.

While most Gulf central banks have raised interest rates in line with the Federal Reserve’s moves, governments in the region have also taken measures to limit the impact of rising prices, such as capping fuel prices.

Rising business activity buoyed by strong demand in the non-oil sector is also driving confidence in Saudi Arabia’s economic outlook. The kingdom’s non-oil private sector grew strongly in October, according to the most recent purchasing managers’ index.