RIYADH: According to Jadwa Investment, robust growth in the non-oil sector and lower prices in key sectors are expected to drive Saudi Arabia’s inflation down to 1.7 percent in 2024, from a previous estimate of 2 percent.
The Riyadh-based investment management and advisory firm ascribed this revision to steady growth in consumer prices, given that inflation increased just 1.6% in the first half of the year.
Jadwa said that lower clothing, footwear, and transportation prices have mitigated inflationary pressures from the housing market. This trend aligns with global patterns, where easing demand and improved supply chains reduce price pressures.
Despite the overall moderation in inflation, housing costs remain a significant driver, particularly in the ‘rentals for housing’ segment. Prices in this category have stayed high due to elevated demand and a tight rental market, exacerbated by high interest rates prompting more Saudis to rent rather than buy homes.
The report said that this trend is expected to persist, maintaining pressure on prices within the housing and utilities segment, which constitutes 25 percent of the Consumer Price Index.
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