JEDDAH: Saudi Arabia’s consumer inflation slowed in December 2016, losing speed for the first time at least since 2012, said a report issued by Al-Rajhi Capital.
Analysts said that inflation in December last grew by 1.7 percent year-on-year versus 2.3 percent year-on-year in November, mainly owing to the fall in food prices. On a month-on-month basis, prices continue to fall with the index dropping by 0.5 percent in December compared to November.
Economists at Al-Rajhi Capital said that the total value of point of sale (POS) transaction declined 5.9 percent year-on-year in December 2016 compared to 3 percent year-on-year in November 2016, while ATM cash withdrawals dropped by 4.5 percent year-on-year in December, higher than 2.2 percent year-on-year fall in November.
According to the data released by the Saudi Arabian Monetary Agency (SAMA), annual value of POS transactions fell by 4.7 percent in 2016, the first drop since the publication of the data in 1993. Similarly, aggregate annual ATM withdrawals fell by 3 percent in 2016, first time since 2013 indicating the ongoing weakness in consumer spending.
The report said that the non-oil private sector’s Purchasing Managers’ Index (PMI) expanded to 55.5 in December 2016, as against 55 in November, backed by a rise in output.
The report said that real estate prices in Saudi Arabia dropped 6.1 percent in 2016, versus a yearly fall of 2.6 percent in 2015, as per the new real estate price index published by GASTAT.
The loan-to-deposit ratio recorded its lowest mark in 11 months as Saudi banks’ claims on the private sector rose at a slower pace of 2.4 percent year-on-year in December while deposits grew marginally in December. On an annual basis, credit growth to private sector slowed down to 2.2 percent in 2016, compared to 9.8 percent in 2015 and last five years’ average growth rate of 12.3 percent.
Saudi Arabia’s foreign reserve assets dropped in December 2016, albeit at a slower pace on a monthly basis.
The Kingdom used around SR300 billion in 2016 (SR435 billion in 2015), mainly to plug fiscal deficit.
On the equity front, the Tadawul All Share Index (TASI) dropped 1.5 percent in January 2017, as compared to a rise of 3 percent month-on-month in December 2016.
The report quoted Saudi finance minister as saying the GDP growth is expected to be higher than 1 percent in 2017, as against 0.4 percent revised by the International Monetary Fund (IMF), largely due to the planned investments in renewable energy coupled with a stimulus package for the private sector.
In a note issued on Saturday, Moody’s Investor Service said that the liquidity pressures on Saudi banks are likely to moderate primarily as a result of subdued credit growth, which will, however, reduce banks’ profit.
Last week, the three-month Saudi Interbank Offered Rate (SAIBOR) fell below the central bank repo rate of 2 percent, its lowest levsel since April 2016. This is credit positive for Saudi banks’ funding costs and confirms that liquidity conditions in Saudi Arabia have eased since the third quarter of 2016 after significant tightening last year because of falling oil prices, the report said.
Saudi inflation slows in December
Saudi inflation slows in December
Saudi Arabia’s approach to AI transformation delivering business value: Publicis Sapient CEO
- Nigel Vaz: We’re reimagining how, in the case of tourism, we transform Saudi Arabia into a destination that is actually relevant and attractive for people to explore
- Vaz: Our Slingshot platform handles everything from design to deployment, allowing legacy modernization and new digital apps to be built
DAVOS: As 2026 emerges as a tipping point for artificial intelligence, executives across the Middle East are moving from experimentation to scaling AI in ways that can deliver real business value, according to Nigel Vaz, CEO of Publicis Sapient.
Speaking to Arab News at the World Economic Forum in Davos, Vaz highlighted Saudi Arabia’s proactive approach to integrating technology into national and sectoral strategies.
“I was in meetings with the minister for tourism in Saudi Arabia (Ahmed Al-Khateeb), where we do a lot of work for them, and meetings with (Communications) Minister Abdullah Alswaha,” he said.
“What you realize is technology is incredibly critical, but it’s critical to the extent that we’re reimagining how, in the case of tourism, we transform Saudi Arabia into a destination that is actually relevant and attractive for people to explore.”
Vaz also highlighted applications of AI beyond tourism, including energy and healthcare.
“You’re thinking about how it can enable a greener approach to energy, which is a big goal for their government,” he said.
“And in healthcare, predictive and preventative approaches allow trends to be addressed before they occur, which is a significant cost saving for the government,” he added.
The shift in mindset around AI reflects a broader trend globally.
“Last year there was a lot of excitement about AI, but most work was at a proof-of-concept stage,” Vaz said. “What’s tipped this year is the recognition that AI is only valuable if it drives real business outcomes.”
This involves moving beyond automating individual tasks to enabling entire workflows or decision sets that produce superior results.
“Individual tasks being automated by AI don’t create business benefit,” he said. “Entire workflows or decision sets need to be enabled by AI, and they must deliver better outcomes than are currently possible today.”
Vaz underscored the importance of integrating people and AI rather than treating technology as a replacement, adding: “Unless you’re a technology nerd, you’re not really caring about the technology for its own sake.”
Geopolitical tensions further heighten the importance of AI for real-time, intelligent decision-making. Vaz explained that Publicis Sapient has developed platforms such as Slingshot, Bodhi and SustainAI to deliver enterprise-grade AI solutions with measurable business impact.
“Our Slingshot platform handles everything from design to deployment, allowing legacy modernization and new digital apps to be built two to three times faster and 30 to 40 percent cheaper,” he said.
Bodhi leverages industry expertise to create agentic capabilities for autonomous decision-making, while Sustain transforms IT service management, using AI to monitor systems, self-heal, and reduce manual workload, he explained
“All of this is not to sell software; it’s to deliver outcomes to clients. That’s what we care about,” Vaz added.
He offered guidance for leaders navigating the AI era.
“An AI North Star is focusing on an area of the business where untapped value can be unlocked,” he said. “Focus on how that value will drive growth, reduce costs, or improve experiences for customers or employees, and use AI to achieve those outcomes, rather than experimenting in small pockets.”
For Vaz, 2026 represents a year when enterprises, particularly in forward-looking Middle Eastern economies like Saudi Arabia, are moving from theory to practice, scaling AI to deliver tangible impact and measurable outcomes for businesses, governments, and citizens alike.
