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The Cost Of Living In KSA Isn’t Rising As Quickly As Before

Saudi cost of living

Inflation in Saudi Arabia increased 2.3% year-on-year in the second quarter, according to Saudi Arabia Monetary Authority (SAMA).

Inflation in Saudi Arabia increased 2.3% year-on-year in the second quarter, according to Saudi Arabia Monetary Authority (SAMA).

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Although the year-on-year increase was expected, the headline figure was actually half-a-point lower than the previous quarter, when inflation increased 2.8% year-on-year.

The cost of living has been on the increase in Saudi Arabia due to a number of factors. The imposition of the 5% value-added tax (VAT) in January has played a part and the cost of imported food, a big part of household expenditure, has also been on the rise.

In Q2, tobacco products registered the biggest year-on-year increase in price, according to SAMA, at 35.8%, followed by transportation at 10.2%, restaurants and hotels at 7.1%, and food and beverages at 5.6%.

Housing and utilities, on the other hand, dropped in price year-on-year, by 0.4%, and clothing and footwear were down 8.2%.

SEE ALSO: Saudi Arabians are borrowing more money this year

While the recent figures suggest inflation is slowing, Jadwa Investment has previously said that it expects a full-year inflation rate of 3.1%, “due to higher higher imported inflation, and higher costs borne by local food and agriculture companies”.

Whatever the full year inflation rate eventually turns out to be, Jadwa Investment believes that the Citizen’s Account and public sector employee allowances will help Saudi nationals “cope with inflationary pressures over the course of the year”.

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