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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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IMF: Pakistan Wins More Financing Assurances from Saudi Arabia, UAE, China

Pakistan’s Prime Minister Shehbaz Sharif (Asharq Al-Awsat)
Pakistan’s Prime Minister Shehbaz Sharif (Asharq Al-Awsat)
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IMF: Pakistan Wins More Financing Assurances from Saudi Arabia, UAE, China

Pakistan’s Prime Minister Shehbaz Sharif (Asharq Al-Awsat)
Pakistan’s Prime Minister Shehbaz Sharif (Asharq Al-Awsat)

Pakistan has received “significant financing assurances” from China, Saudi Arabia and the United Arab Emirates linked to a new International Monetary Fund (IMF) program that go beyond a deal to roll over $12 billion in bilateral loans owed to them by Islamabad, IMF Pakistan Mission Chief Nathan Porter said on Thursday.

Porter declined to provide details of additional financing amounts committed by the three countries but said they would come on top of the debt rollover.

The IMF's Executive Board on Wednesday approved a new $7 billion loan for cash-strapped Pakistan, more than two months after the two sides said they had reached an agreement.

The loan — which Islamabad will receive in installments over 37 months — is aimed at boosting Pakistan's ailing economy.

“I won't go into the specifics, but UAE, China and the Kingdom of Saudi Arabia all provided significant financing assurances joined up in this program,” Porter told reporters on a conference call.

The global lender said its immediate disbursement will be about $1 billion.

In a statement issued Thursday, the IMF praised Pakistan for taking key steps to restore economic stability. Growth has rebounded, inflation has fallen to single digits, and a calm foreign exchange market have allowed the rebuilding of reserve buffers.

But it also criticized authorities. The IMF warned that, despite the progress, Pakistan’s vulnerabilities and structural challenges remained formidable.

It said a difficult business environment, weak governance, and an outsized role of the state hindered investment, while the tax base remained too narrow.

“Spending on health and education has been insufficient to tackle persistent poverty, and inadequate infrastructure investment has limited economic potential and left Pakistan vulnerable to the impact of climate change,” it warned.

Prime Minister Shehbaz Sharif in a statement hailed the deal that his team had been negotiating with the IMF since June.

Sharif, on the sidelines of the United Nations General Assembly, told Pakistani media that the country had fulfilled all of the lender’s conditions, with help from China and Saudi Arabia.

“Without their support, this would not have been possible,” he said, without elaborating on what assistance Beijing and Riyadh had provided to get the deal over the line.

The Pakistani government has vowed to increase its tax intake, in line with IMF requirements, despite protests in recent months by retailers and some opposition parties over the new tax scheme and high electricity rates.

Pakistan for decades has been relying on IMF loans to meet its economic needs.

The latest economic crisis has been the most prolonged and has seen Pakistan facing its highest-ever inflation, pushing the country to the brink of a sovereign default last summer before an IMF bailout.

Inflation has since tempered, and credit ratings agency Moody’s has upgraded Pakistan’s local and foreign currency issuer and senior unsecured debt ratings to “Caa2” from “Caa3”, citing improving macroeconomic conditions and moderately better government liquidity and external positions.