A recently-released report by Jadwa Investment notes that the Kingdom will see a slight increase in inflation in 2020 on expectations of a continued pick-up in non-oil activities and an elevated level of consumer spending.
“The latest General Authority for Statistics (GaStat) inflation release for December shows that prices were up by 0.2 percent year-on-year, and by 0.1 percent month-on-month. As such, the annual inflation rate for 2019 averaged at –1.2 percent, year-on-year, which was exactly in-line with our forecast,” Jadwa said.
During 2019, the highest price rises was seen in the restaurants and hotels sector, with an increase of 1.7 percent, followed by education by 1.6 percent, year-on-year. Meanwhile, the largest decline in prices came in housing and utilities, down by 6.5 percent year-on-year, mainly as a result of rentals for housing, which declined by 7.4 percent year-on-year in 2019.
Jadwa notes that the rises in the restaurants and hotels sector were a result of increasing demand in entertainment and tourism in the Kingdom, following the emerging activities associated with the Saudi Seasons in different regions during 2019.
With Saudi Arabia hosting the G20 summit in November 2020, “we expect to see higher demand for hotels and meeting venues in Riyadh and a number of cities around the Kingdom,” Jadwa said.