Media Centre

Saudi’s 2024 inflation forecast revised down to 1.7%

Saudi Arabia’s inflation this year is expected to be lower than previously anticipated, as the non-oil growth momentum continues.

In its latest report, Jadwa Investment said it has lowered its inflation forecast for full year 2024 to 1.7%, versus 2% previously.

“We still expect higher inflation rates in H2 than in H1. However, we expect this rise to be lower than we previously anticipated,” the report said.

Saudi’s consumer price growth reached 1.6% in the first half of 2024, with housing costs a major driving factor.

During the second half of the year, Jadwa anticipates prices in food and beverages to see a gradual rebound, in line with global trends.

There will also be marginal pressure from shipping prices, although the rental sector is expected to remain tight for the rest of the year, given the high interest rate environment and influx of expatriates, according to Jadwa.

However, if interest rates do fall before the end of the year, rental demand in the kingdom could ease, as lower rates are likely to drive Saudi nationals back to the mortgage market.

Overall, the rental market in Saudi will still remain strong due to “solid non-oil growth”.

Other non-oil sectors in Saudi Arabia, such as transport, hotels and services in general are also likely to see an increase in demand for the rest of the year.