Housing, Utilities and Fuel Drive Inflation Index in Saudi Arabia

People shop at a supermarket in Saudi Arabia. (Asharq Al-Awsat)
People shop at a supermarket in Saudi Arabia. (Asharq Al-Awsat)
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Housing, Utilities and Fuel Drive Inflation Index in Saudi Arabia

People shop at a supermarket in Saudi Arabia. (Asharq Al-Awsat)
People shop at a supermarket in Saudi Arabia. (Asharq Al-Awsat)

Saudi Arabia’s inflation rate increased to 2% in November, the highest in 15 months. The rise was driven primarily by a 9.1% increase in housing, water, electricity, gas, and other fuel prices, alongside a 2.7% rise in prices for miscellaneous goods and personal services. In contrast, transportation costs fell by 2.5%.

Despite the increase, Saudi Arabia remains the G20 nation with the lowest inflation rate, a level economists describe as relatively moderate.

According to the Consumer Price Index report published by the General Authority for Statistics (GASTAT) on Sunday, the housing, water, electricity, gas, and other fuel category saw a 9.1% rise, which was mainly due to a 10.8% surge in residential rents.

Housing costs significantly influenced overall inflation, as this category accounts for 25.5% of the consumer basket. Similarly, prices for miscellaneous goods and personal services rose by 2.7%, driven by a 23.7% increase in the prices of jewelry, watches and antiques.

The restaurants and hotels category also experienced a 1.5% rise, fueled by a 5.9% increase in hotel and furnished apartment service costs. Meanwhile, education expenses increased by 1.1%, reflecting a 1.8% rise in tuition fees for middle and secondary schools.

Food and beverage prices rose slightly by 0.3%, primarily due to a 1.9% increase in the cost of meat and poultry.

Dr. Naif Al-Ghaith, Chief Economist at Riyad Bank, linked the 2% year-on-year inflation increase to economic shifts under Vision 2030, which aims to diversify Saudi Arabia’s economy and reduce reliance on oil.

According to Al-Ghaith, the housing and utilities sector was the primary contributor to inflation, with residential rent prices, particularly for apartments, increasing by 12.5%.

Moreover, the 2.7% increase in miscellaneous goods and personal services reflects changes in consumption patterns and rising demand for certain goods and services amid Saudi Arabia’s ongoing economic and social transformation.

In contrast, the transportation sector’s 2.5% decline helped offset inflationary pressures. Al-Ghaith attributed this decrease to improvements in transportation infrastructure and enhanced logistics efficiency, aligning with Vision 2030’s objectives to modernize the transport and logistics sectors.

Al-Ghaith noted that these inflationary changes are part of the Kingdom’s broader economic transformation. For instance, rising housing costs may indicate increased investment in real estate and improved living standards. Similarly, higher prices for personal goods and services reflect the economy’s diversification and the emergence of new industries.



French CMA CGM to Acquire Turkish Borusan's Logistics Subsidiary in $440 mln Deal

The CMA CGM Greenland container ship is seen at sea with Paris 2024 and the Olympic rings on it during the Olympics torch relay ahead Paris 2024 Olympic games, in Marseille, France, May 9, 2024. REUTERS/Benoit Tessier/File Photo
The CMA CGM Greenland container ship is seen at sea with Paris 2024 and the Olympic rings on it during the Olympics torch relay ahead Paris 2024 Olympic games, in Marseille, France, May 9, 2024. REUTERS/Benoit Tessier/File Photo
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French CMA CGM to Acquire Turkish Borusan's Logistics Subsidiary in $440 mln Deal

The CMA CGM Greenland container ship is seen at sea with Paris 2024 and the Olympic rings on it during the Olympics torch relay ahead Paris 2024 Olympic games, in Marseille, France, May 9, 2024. REUTERS/Benoit Tessier/File Photo
The CMA CGM Greenland container ship is seen at sea with Paris 2024 and the Olympic rings on it during the Olympics torch relay ahead Paris 2024 Olympic games, in Marseille, France, May 9, 2024. REUTERS/Benoit Tessier/File Photo

French shipping giant CMA CGM's subsidiary CEVA Corporate Services has signed a deal to acquire Turkish conglomerate Borusan's logistics arm, Borusan Tedarik Zinciri Cozumleri ve Teknoloji, for $440 million, according to a filing by the Turkish company.

Borusan Yatirim said in the exchange filing that the price was subject to ordinary net cash and working capital adjustments, adding that the deal was subject to approval from competition authorities and other relevant regulatory bodies.

Borusan Tedarik operates the largest port in Türkiye's manufacturing hub of Gemlik, with an annual capacity to handle 1,500 ships and around 400,000 twenty-foot containers (TEU), a standard measure for shipping containers.

CMA CGM is the world's third-largest container line, Reuters reported.

Headquartered in Marseille, France, CEVA offers a broad range of end-to-end contract logistics and air, ocean, ground and finished vehicle transport in 170 countries worldwide thanks to its approximately 110,000 employees at more than 1,500 facilities.

CEVA said its planned acquisition of Borusan Tedarik, would nearly double its warehousing and distribution footprint in Türkiye, adding around 570,000 square metres to its existing 620,000 square metres of space.

The deal would also boost its domestic ground transport operations, with the combined activities expected to handle nearly 1 million domestic shipments annually, CEVA said in a statement on its website. Borusan Tedarik's network is set to strengthen CEVA's connections with Europe, the company added.

CEVA said Borusan Tedarik's strong ties in the automotive sector would help lift its finished vehicle logistics (FVL) operations into a top-three position domestically. The acquisition is also expected to expand CEVA's ocean freight capacity by 25% and place its air freight operations among the top five in Türkiye.