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Saudi Arabia Maintains Control over Inflation at 2.3%

A food and consumer goods markets in Saudi Arabia (Asharq Al-Awsat)
A food and consumer goods markets in Saudi Arabia (Asharq Al-Awsat)
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Saudi Arabia Maintains Control over Inflation at 2.3%

A food and consumer goods markets in Saudi Arabia (Asharq Al-Awsat)
A food and consumer goods markets in Saudi Arabia (Asharq Al-Awsat)

Saudi Arabia’s government has effectively managed to contain inflation, slowing it down to its lowest level in a year, recording 2.3% in July compared to 2.7% in the same month of the previous year.

This was even lower than the 2.7% recorded in June.

The government’s control over the inflation rate is the result of economic measures and actions it swiftly undertook early on to confront the global surge in prices.

Experts interviewed by Asharq Al-Awsat emphasize the significance of the decrease in actual housing rental rates in July, which stood at 10.3 %, down from 10.8 % in June. This factor has played a pivotal role in reining in the inflation rate in the Kingdom.

Notably, housing rental costs constitute the largest sub-category in the consumer price index, accounting for 21 % of the index weight.

Experts also highlight the contributions of government initiatives and programs related to the real estate and housing sector in boosting the supply of real estate products in general, particularly residential apartments.

This has had a direct impact on rental prices. Additionally, the reduction in real estate financing due to the recent interest rate hike by the Saudi Central Bank has also played a role.

Mohammed Makni, a finance and investment professor at the College of Economics and Administrative Sciences at Imam Muhammad Ibn Saud Islamic University, explains that the inflation rate has experienced consecutive declines in the past three months, attributed mainly to the ongoing interest rate hikes by the Saudi Central Bank.

“In July of the previous year, the Federal Reserve decided to raise the interest rate by 25 basis points, and Saudi Arabia followed suit by raising its interest rate by the same level. This reduced the liquidity in the local market and consequently impacted the inflation rate,” Makni told Asharq Al-Awsat.

“According to the latest statistics from the Saudi Central Bank, consumer loans during the second quarter of the current year have witnessed a decrease, reaching 443 billion riyals ($118.1 billion), confirming the Kingdom's approach of draining liquidity from the local market,” he added.

Makni further elucidates that most activities in the Consumer Price Index during July showed a positive change. He anticipated the inflation rate to remain stable around 2% to 2.5% in the coming months, depending on the decisions taken by the US Federal Reserve.

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Future Investment Initiative Conference Gathers Global Decision-Makers in Riyadh

One of the dialogue sessions of the Future Investment Initiative in its previous edition (Asharq Al-Awsat)
One of the dialogue sessions of the Future Investment Initiative in its previous edition (Asharq Al-Awsat)
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Future Investment Initiative Conference Gathers Global Decision-Makers in Riyadh

One of the dialogue sessions of the Future Investment Initiative in its previous edition (Asharq Al-Awsat)
One of the dialogue sessions of the Future Investment Initiative in its previous edition (Asharq Al-Awsat)

Under the patronage of the Custodian of the Two Holy Mosques, King Salman bin Abdulaziz, Riyadh is set to launch the eighth edition of the Future Investment Initiative (FII) conference on Monday.
This year’s event carries the theme, “Infinite Horizons... Investing Today, Shaping Tomorrow” and will feature prominent figures in finance, investment, and technology.
Through its annual conference, often called the “Davos of the Desert,” the Future Investment Initiative aims to foster discussions on how investment can drive a prosperous and sustainable future, expanding the possibilities for humanity.
The conference is expected to attract over 7,000 guests and 500 speakers, covering a wide range of current topics across more than 200 sessions. Key areas of focus include economic stability, equitable development, climate change, artificial intelligence, innovation, health, and geopolitical issues.
Among those looking to leverage projects aligned with Saudi Arabia’s Vision 2030 are David Solomon of Goldman Sachs, Jane Fraser of Citigroup, and Larry Fink of BlackRock, which recently agreed to establish a multi-asset investment platform in Riyadh, backed by a $5 billion investment from Saudi Arabia’s sovereign wealth fund. This year, the conference will also host the New Africa Summit, featuring speakers from Africa’s mining and banking sectors.
Reflecting Saudi Arabia’s emphasis on technology and artificial intelligence, industry leaders in these fields will participate in the event. Notably, Alphabet President Ruth Porat, TikTok CEO Shou Zi Chew, and tech entrepreneur Benjamin Horowitz, co-founder of the venture capital firm Andreessen Horowitz, are scheduled to speak for the first time.
According to Richard Attias, CEO of the Future Investment Initiative, executives worldwide are expected to announce deals exceeding $28 billion. Some of these initiatives will focus on artificial intelligence, including a new potential fund with Andreessen Horowitz that could grow to $40 billion, as reported by Bloomberg.
The Kingdom is also expected to announce a new company that will invest at least $10 billion in making Saudi Arabia the world’s largest producer of hydrogen—a low-carbon fuel critical for the global transition away from fossil fuels. Key speakers from Asia will include Hong Kong’s Financial Secretary Paul Chan and Belt and Road Commissioner Nicholas Ho.
On the eve of the event, Swiss entrepreneur and FII participant Stephan Knuser told Asharq Al-Awsat that the conference will provide significant business insights for both local and international communities, anticipating that new partnerships will form between Swiss and Saudi companies in energy-efficient technologies and food security.
Neil Bush, Chairman of Sky Towers, remarked: “We view FII as not only a driver for attracting capital but also for bringing in technologies that accelerate Saudi Arabia’s goals.” According to Bush, the FII topics align with needs like business registration processes, free trade zone policies, and strategies for developing industrial complexes, which will help accelerate Vision 2030 goals, including carbon reduction.