The latest official government figures on inflation for Saudi Arabia show a decline in prices after a year of reforms, according a recently released report by Jadwa Investment.
Over the last year, Saudi Arabia has introduced a number of reform measures, including the introduction of a VAT, utility price reform, and other changes. The latest General Authority for Statistics (GaStat) April inflation release shows that prices declined by 1.9 percent year-on-year, and remained unchanged month-on-month.
“In the year-to-April, prices have declined by a yearly average of 2.1 percent, as such, we have revised our full year inflation forecast to -1.7 percent, year-on-year, which partly reflects the price base effect from 2018, due to VAT implementation and energy and utility price reforms,” according to Jadwa Investment. “In addition, on a month-on-month basis, prices continued to slow, following a trend seen since August 2018, indicating a gradual slowdown in prices as the local economy adjusts to VAT, utility price reform, and other structural changes in the labor market.”
Other interesting data points in the report from the Riyadh-based Jadwa Investment:
–Rentals for housing declined by an average of 9.1 percent year-to April. ‘Housing and utilities’ prices were down by 8 percent year-to-April. This slowdown in prices is mainly due to the impact of ‘rentals for housing’, a sub-item with a large weight in the segment, which declined by an average of 9.1 percent year-to-April.
–Transportation prices declined by 0.5 percent in the year-to-April, despite a spike in April.
-Compared with last year, Jadwa found significant rises in consumer spending on transportation, restaurants and hotels, and food and beverages groups.