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Saudi Arabia Registers in October Lowest Inflation Level in Two Years

A supermarket in Saudi Arabia (SPA)
A supermarket in Saudi Arabia (SPA)
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Saudi Arabia Registers in October Lowest Inflation Level in Two Years

A supermarket in Saudi Arabia (SPA)
A supermarket in Saudi Arabia (SPA)

Saudi Arabia was able to record the lowest level of inflation rate in nearly two years at 1.6 percent in October, on an annual basis - the same rate registered in February 2022.
Moody’s on Wednesday raised its expectations for the growth of the Kingdom’s economy next year to 4.6 percent. The consumer price index in the Kingdom continues to decline for the fourth month in a row, recording 1.7 percent in September 2023, compared to the same period last year.
Data issued by the General Authority for Statistics (GASTAT) on Wednesday, showed that actual housing rents rose by 9.3 percent during October, affected by the increase in apartment rental prices by 14.9 percent.
The rise of this category had a significant impact on the rise in annual inflation for October 2023, due to its large weight in the index, which amounts to 21 percent.
Food and beverage prices increased by 0.8 percent, affected by a 4.4 percent rise in the prices of milk, dairy products, and eggs.
In this context, experts told Asharq Al-Awsat that the government was adopting accelerated measures to confront the global rise in the inflation rate. Those include fixing the ceiling on fuel prices and countries bearing the difference in the increase, as well as supporting small livestock breeders and increasing strategic stocks of basic materials.
Economist Ahmed Al-Jubeir told Asharq Al-Awsat that the government was controlling the inflation rate, thanks to a series of measures, including stabilizing fuel prices and increasing strategic stocks of basic materials.
He added that inflation in the Kingdom was one of the lowest compared to advanced economies.
For his part, economic expert Ahmed Al-Shehri told Asharq Al-Awsat that the decline in inflation was due to the central bank’s tightening monetary policy by raising the interest rate, in line with the decision of the US Federal Reserve, in addition to government measures related to supporting strategic stocks of basic materials and stabilizing fuel prices.
Meanwhile, Moody’s Investors Service report said that Saudi Arabia’s gross domestic product growth forecast for 2024 was now 4.6 percent, compared to a previous calculation of 3 percent.
Moody’s indicated that the Kingdom’s credit strengths come from its robust government balance sheet, supported by large foreign currency buffers.

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US Economy Grew at Solid 3% Rate Last Quarter, Government Says in Final Estimate

FILE - The New York Stock Exchange, at rear, is shown on Sept. 24, 2024, in New York. (AP Photo/Peter Morgan, File)
FILE - The New York Stock Exchange, at rear, is shown on Sept. 24, 2024, in New York. (AP Photo/Peter Morgan, File)
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US Economy Grew at Solid 3% Rate Last Quarter, Government Says in Final Estimate

FILE - The New York Stock Exchange, at rear, is shown on Sept. 24, 2024, in New York. (AP Photo/Peter Morgan, File)
FILE - The New York Stock Exchange, at rear, is shown on Sept. 24, 2024, in New York. (AP Photo/Peter Morgan, File)

The American economy expanded at a healthy 3% annual pace from April through June, boosted by strong consumer spending and business investment, the government said Thursday, leaving its previous estimate unchanged.
The Commerce Department reported that the nation's gross domestic product — the nation's total output of goods and services — picked up sharply in the second quarter from the tepid 1.6% annual rate in the first three months of the year, The Associated Press reported.
Consumer spending, the primary driver of the economy, grew last quarter at a 2.8% pace, down slightly from the 2.9% rate the government had previously estimated. Business investment was also solid: It increased at a vigorous 8.3% annual pace last quarter, led by a 9.8% rise in investment in equipment.
The final GDP estimate for the April-June quarter included figures showing that inflation continues to ease, to just above the Federal Reserve’s 2% target. The central bank’s favored inflation gauge — the personal consumption expenditures index, or PCE — rose at a 2.5% annual rate last quarter, down from 3% in the first quarter of the year. Excluding volatile food and energy prices, so-called core PCE inflation grew at a 2.8% pace, down from 3.7% from January through March.
The US economy, the world's biggest, displayed remarkable resilience in the face of the 11 interest rate hikes the Fed carried out in 2022 and 2023 to fight the worst bout of inflation in four decades. Since peaking at 9.1% in mid-2022, annual inflation as measured by the consumer price index has tumbled to 2.5%.
Despite the surge in borrowing rates, the economy kept growing and employers kept hiring. Still, the job market has shown signs of weakness in recent months. From June through August, America's employers added an average of just 116,000 jobs a month, the lowest three-month average since mid-2020, when the COVID pandemic had paralyzed the economy. The unemployment rate has ticked up from a half-century low 3.4% last year to 4.2%, still relatively low.
Last week, responding to the steady drop in inflation and growing evidence of a more sluggish job market, the Fed cut its benchmark interest rate by an unusually large half-point. The rate cut, the Fed’s first in more than four years, reflected its new focus on shoring up the job market now that inflation has largely been tamed.
Some other barometers of the economy still look healthy. Americans last month increased their spending at retailers, for example, suggesting that consumers are still able and willing to spend more despite the cumulative impact of three years of excess inflation and high borrowing rates. The nation’s industrial production rebounded. The pace of single-family-home construction rose sharply from the pace a year earlier.
And this month, consumer sentiment rose for a third straight month, according to preliminary figures from the University of Michigan. The brighter outlook was driven by “more favorable prices as perceived by consumers” for cars, appliances, furniture and other long-lasting goods.
A category within GDP that measures the economy’s underlying strength rose at a healthy 2.7% annual rate, though that was down from 2.9% in the first quarter. This category includes consumer spending and private investment but excludes volatile items like exports, inventories and government spending.
Though the Fed now believes inflation is largely defeated, many Americans remain upset with still-high prices for groceries, gas, rent and other necessities. Former President Donald Trump blames the Biden-Harris administration for sparking an inflationary surge. Vice President Kamala Harris, in turn, has charged that Trump’s promise to slap tariffs on all imports would raise prices for consumers even further.
On Thursday, the Commerce Department also issued revisions to previous GDP estimates. From 2018 through 2023, growth was mostly higher — an average annual rate of 2.3%, up from a previously reported 2.1% — largely because of upward revisions to consumer spending. The revisions showed that GDP grew 2.9% last year, up from the 2.5% previously reported.
Thursday’s report was the government’s third and final estimate of GDP growth for the April-June quarter. It will release its initial estimate of July-September GDP growth on Oct. 30.