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Saudi Housing Rents Propel Inflation to 1.8% in February

Intensive efforts to control the inflation rate in Saudi Arabia (Asharq Al-Awsat)
Intensive efforts to control the inflation rate in Saudi Arabia (Asharq Al-Awsat)
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Saudi Housing Rents Propel Inflation to 1.8% in February

Intensive efforts to control the inflation rate in Saudi Arabia (Asharq Al-Awsat)
Intensive efforts to control the inflation rate in Saudi Arabia (Asharq Al-Awsat)

Saudi Arabia’s annual inflation rate rose to 1.8% in February from 1.6% the previous month driven by increases in housing rents.

Despite this uptick, inflation has remained relatively low in Saudi Arabia compared to global levels, with government policies limiting the impact of international price increases.

The Kingdom recently ranked second among G20 countries with the lowest inflation rates, after Switzerland, which registered 1.3%.

The rise in inflation in February was driven by pressures from housing, water, electricity, gas prices, and other fuel types, which increased by 8.5%, and food and beverage prices by 1.3%.

Conversely, transportation prices decreased by 0.9%, as did various personal goods and services by 1.1%.

According to the latest Consumer Price Index report for February 2024 released by the General Authority for Statistics (GASTAT) on Thursday, housing rents soared by 10% annually, driven by a 9.1% spike in villa rents, significantly impacting overall inflation.

Experts believe Saudi Arabia is managing inflation well compared to other economies. They suggest continued investment in housing projects to lower property prices and rents, thus reducing inflation.

Shura Council member Fadhel Al-Buainain clarified to Asharq Al-Awsat that consumer spending is directly affected by price hikes, reducing purchasing operations and negatively impacting markets, extending beyond consumers to affect the retail sector and other sectors, limiting their expansion and sustainability as well.

According to Al-Buainain, among the tools contributing to reducing the inflation rate is providing goods and products exceeding market demand, achievable through three main axes: stimulating national production to meet the majority of local needs, regulating prices, and exerting more pressure on them in the case of fair competition among producers and avoiding monopolies.

Additionally, encouraging development companies to build more affordable housing could help ease the cost of living.

Overall, efforts to stabilize housing costs and stimulate production are expected to keep inflation in check in Saudi Arabia.

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China Eyes Electric Vehicle Manufacturing Opportunities in Saudi Arabia

Chinese ambassador to Saudi Arabia (Asharq Al-Awsat)
Chinese ambassador to Saudi Arabia (Asharq Al-Awsat)
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China Eyes Electric Vehicle Manufacturing Opportunities in Saudi Arabia

Chinese ambassador to Saudi Arabia (Asharq Al-Awsat)
Chinese ambassador to Saudi Arabia (Asharq Al-Awsat)

China’s ambassador to Saudi Arabia, Chang Hua, expressed Beijing’s hopes to strengthen its partnership with the kingdom, especially in electric vehicle production and other industries.
Speaking to Asharq Al-Awsat, Hua condemned violations of Lebanon’s sovereignty and the targeting of civilians.
He called for immediate action to reduce tensions and prevent further escalation in the region.
“China is deeply shocked by the high civilian casualties from the conflict between Israel and Lebanon,” Hua said, urging the international community to work on calming the situation.
He emphasized that, no matter how things unfold, “China will always stand for justice and remain committed to peace and stability in the Middle East. We are ready to work with all parties to promote peace in the region.”
China’s Economic Growth
Hua highlighted China’s rise from a $30 billion economy to a $17.8 trillion one, making it the world’s second-largest economy and a leader in trade and industry.
He reiterated China’s goal to maintain high-level openness, push for high-quality economic development, and promote a multipolar world with fair global governance and inclusive economic globalization.
Saudi-China Relations
Hua described the partnership between Saudi Arabia and China as entering a new phase of deep development, congratulating Saudi Arabia on its 94th National Day.
He noted that Chinese Premier Li Qiang’s recent visit to Saudi Arabia has boosted bilateral relations and strengthened the comprehensive strategic partnership, driving it towards a more stable and prosperous future.
The ambassador stressed the need to expand trade and investment between the two countries and highlighted the upcoming “Saudi-Chinese Cultural Year 2025” as a key event.
Hua also pointed out that Saudi Crown Prince Mohammed bin Salman values the strong and historic relationship between the two nations.
The Crown Prince looks forward to further aligning Saudi Vision 2030 with China’s Belt and Road Initiative, expanding cooperation in energy, investment, and culture.
Hua noted that China is Saudi Arabia’s largest trading partner, with bilateral trade exceeding $100 billion in the past two years. He also mentioned the recent currency swap agreement between the two countries, which has helped boost trade and investment.
New Developments in Saudi-China Relations
According to Hua, the cooperation between the two nations has grown significantly, particularly in the automotive, renewable energy, and tourism sectors.
In 2023, Saudi imports of Chinese cars reached $4.12 billion, driven by companies like Changan, Geely, MG, Chery, Great Wall, Hongqi, GAC, and BYD, which have opened branches in the kingdom.
Discussions are ongoing about building local manufacturing plants. China exported 4.91 million vehicles in 2023, making it the largest car exporter globally for the first time, including 1.203 million electric vehicles, a 77.6% increase from the previous year.
Hua noted that Saudi Vision 2030 aims for electric vehicles to account for at least 30% of all cars in Riyadh by 2030, and he expressed optimism about enhancing collaboration in automotive manufacturing.
Chinese companies are also increasingly involved in Saudi Arabia’s renewable energy sector. They are working on multiple solar projects, including the Al Shuaibah photovoltaic plant, the largest of its kind in the world, with a capacity of 2.6 gigawatts.
In July 2023, the Renewable Energy Localization Company (RELC), backed by the Saudi Public Investment Fund, signed agreements with three Chinese firms—Envision Technology Group, Jinko Solar, and TCL Zhonghuan—to establish joint ventures for high-efficiency solar cell production in Saudi Arabia.
These projects will focus on producing solar components, helping Saudi Arabia achieve its goal of sourcing 75% of renewable energy project components locally by 2030.
Hua also highlighted the increasing exchange of visits between citizens of both countries. In September 2023, China and Saudi Arabia signed a memorandum of understanding to facilitate group tourism, making the kingdom an official destination for Chinese tour groups.
Several Chinese travel agencies have begun offering packages to Saudi Arabia, and direct flights between the two countries are increasing. Saudi Airlines has expanded its routes, operating numerous weekly flights between Beijing, Shanghai, Shenzhen, Riyadh, and Jeddah.