Consumer prices in Saudi Arabia came close to almost 3.3 per cent year-on-year in December, with higher housing costs being the major factor in driving up inflation in Saudi Arabia.
Inflation has been escalating globally, as it escalated prior to 2020 following the Covid-19 pandemic which severely impacted major strong economies due to harsh lockdowns.
The ongoing Russia-Ukraine war is a big contributor to this trend of rising inflation which is being seen worldwide. The struggle in Ukraine has caused economic instability and unpredictability, resulting in prices going up in a number of countries. The Middle East, and Saudi Arabia specifically, has particularly been impacted by this trend, with inflation rising to almost 3.3 per cent. This is a considerable jump and is set to cause alarm among government officials and economists.
There are a few aspects that are adding to the surge in inflation in Saudi Arabia. One of the primary drivers is the ongoing battle in Ukraine, which has triggered a tremendous drop in the worth of the Russian ruble. This has had a ripple effect on the global economy, resulting in increased prices for a lot of commodities and services in the world but also in Saudi Arabia.
Another factor that is adding to the rise in inflation in Saudi Arabia is the reduction in oil costs. As one of the leading oil-producing countries and a member of OPEC, Saudi Arabia is heavily dependent on oil exports to fuel its economy.
When crude oil prices decrease, it can put pressure on the economy and lead to inflation. Even with these difficulties, the Saudi government is taking action to deal with inflation. The Saudi government has implemented several measures to help balance the economy and control inflation, such as reducing spending and raising taxes. On top of that, Vision 2030 is planning to diversify the economy and reduce its dependence on oil exports.
Nevertheless, the Saudi government is taking measures to tackle the issue and stabilize the economy in the long run. Prices have been on the rise all over the world and the Russia-Ukrainian war is a primary factor in this.
This has caused economic instability and uncertainty, which has caused prices to go up in many countries around the world and the kingdom of Saudi Arabia was no exception.