Saudi Arabia’s inflation rate rose to 4.3% in January 2016 – the highest figure recorded in five years, according to a Jadwa Investment report.
The report cites the increase in energy prices as the reason behind the rise in cost of living, water, power, gas and transport, according to daily Al Arab.
Saudi Authorities increase the price of 91 and 95 octane gasoline by 50% and diesel by 81% in an effort to generate much needed income following the $100bn budget deficit announcement.
The value of yearly energy subsidies over the past five years averaged $100bn – 4.5% of the GDP.
A second round of energy price increases is expected to take place, which will have inflationary repercussions on the market.
The housing sector has already witnessed an inflation rate increase of 4.3% year-on-year, while transport suffered a sharp inflation rate increase of 11.3% to12.6% in January 2016 – the highest recorded in 21 years.Â
