The International Monetary Fund (IMF) projected a 2.5% inflation rate, measured by the Consumer Price Index (CPI), for Saudi Arabia this year, with anticipations of a decrease to 2.2% in the following year.
According to a report on the World Economic Outlook released this Tuesday, Saudi Arabia has achieved the second-lowest inflation rate amongst G20 countries this year, second only to China, which is predicted to register an inflation rate of 0.7% in 2023, and 1.7% in the upcoming year.
The IMF has also projected inflation rates for the United States at 4.1% this year, tapering to 2.8% in the next.
In stark contrast, countries in the Middle East and Central Asia are predicted to experience an average inflation rate skyrocketing to 18% in 2023, before slightly easing to 15.2% in 2024.
Furthermore, a recent report from the Saudi Ministry of Finance revealed that the average CPI inflation rate in Saudi Arabia has experienced a rise from the beginning of 2023, hitting 2.7% up until last August, compared to the same period in the previous year.
In its preliminary statement for the 2024 budget, the ministry’s initial predictions indicate that the CPI for the entirety of 2023 will be approximately 2.6%.
Saudi Arabia’s Ministry highlighted that inflation rates within the Kingdom have remained at relatively reasonable levels compared to both developed and developing countries, thanks to the proactive measures and policies implemented by the government to contain price rises.
This includes implementing a cap on gasoline prices, elevating the level of food reserves, and supporting social protection programs.
The ministry clarified that this is despite the global inflation rate increases and several countries’ central banks tightening monetary policy by raising interest rates to curb the general level of price rises.
This action is taken to counter the consistent increase in demand pace against disruptions on the supply side, driven by impacts on global supply chains, which have subsequently led to a rise in prices for basic goods and logistic services worldwide.
The inflation rate is expected to remain at relatively acceptable levels in the medium term. The Saudi Ministry of Finance predicts a decrease in inflation rates to 2.2% in 2024, reaching 2.1% in 2025.
