Saudi Arabia’s inflation rate hits 1.6%: GASTAT 

According to the General Authority for Statistics, actual housing rents surged by 10.7 percent year on year in August, with apartment rents rising by 10.8 percent. Shutterstock
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Updated 16 September 2024
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Saudi Arabia’s inflation rate hits 1.6%: GASTAT 

  • Saudi inflation rate remains among the lowest in MENA, reflecting Kingdom’s proactive measures to stabilize economy
  • Kingdom’s Wholesale Price Index rose by 3.2% in August compared to the same month in 2023

RIYADH: Saudi Arabia’s annual inflation rate reached 1.6 percent in August compared to the same month last year, driven by higher housing costs, official data showed. 

According to the General Authority for Statistics, actual housing rents surged by 10.7 percent year on year in August, with apartment rents rising by 10.8 percent. 

Saudi Arabia’s inflation rate remains among the lowest in the Middle East and North Africa, reflecting the Kingdom’s proactive measures to stabilize the economy and mitigate the effects of global price pressures. 

“The increase in this category (housing) had a significant impact on maintaining the annual inflation rate for August 2024, given the weight this group represents 21 percent,” said GASTAT. 

The latest report showed that food and beverage prices in the Kingdom saw a slight increase of 0.9 percent in August, while restaurant and hotel expenses rose by 1.6 percent during the same period. 

In the education sector, costs increased by 1.6 percent in August, driven by a 3.8 percent rise in fees for intermediate and secondary education. 

Prices for furnishing and home equipment dropped by 3.5 percent, driven by a 6.2 percent decline in the costs of furniture, carpets, and flooring. 

Clothing and footwear prices fell by 3.2 percent, and transportation expenses decreased by 3.4 percent compared to August last year. 

On a month-to-month basis, Saudi Arabia’s consumer price index edged up by 0.1 percent in August. 

The report said that the monthly inflation was influenced by a 0.4 percent rise in housing, water, electricity, gas, and other fuel costs. 

GASTAT also noted a 0.4 percent month-on-month increase in food and beverage prices, while restaurant and hotel expenses grew by 0.2 percent. 

Prices for education, personal goods and services, health, communications, and tobacco remained relatively stable compared to July. 

Ayman Al-Sayari, governor of the Saudi Central Bank, highlighted the Kingdom’s success in maintaining stable inflation levels, attributing it to the strong support of its exchange rate policy. 

Speaking at the 83rd meeting of the Central Bank Governors Committee of the Gulf Cooperation Council in Doha on Sept. 12, he said that the average inflation rate in Saudi Arabia stood at 2 percent from 2000 to 2023. 

“Monetary policies strongly positively influence the effectiveness of public spending, thereby supporting the objectives of economic diversification. The exchange rate policy has contributed positively toward the ability to formulate long-term economic policies,” said Al-Sayari. 

He added: “Monetary stability is an essential enabler for economic growth in the Kingdom, with non-oil activities experiencing an average growth rate of 5 percent from 2022 to 2023.” 

In August, Riyadh-based investment management and advisory firm Jadwa Investment shared a similar outlook, predicting that Saudi Arabia’s inflation will decline to 1.7 percent in 2024, revised down from 2 percent, supported by strong non-oil sector growth and lower prices in key areas. 

The analysis indicated that falling prices in clothing, footwear, and transportation have helped offset inflationary pressures from the housing market. This mirrors global trends, where easing demand and improved supply chains are reducing price pressures. 

Jadwa Investment said that housing costs continue to be a major driver of inflation in Saudi Arabia, particularly in the ‘rentals for housing’ segment. Prices in this category have remained high due to strong demand and a tight rental market, further strained by high interest rates that are leading more Saudis to rent rather than purchase homes. 

Wholesale Price Index 

In a separate report, GASTAT revealed that Saudi Arabia’s Wholesale Price Index rose by 3.2 percent in August compared to the same month last year. 

The authority attributed the increase in WPI to a rise in the prices of other transportable goods, which climbed by 8.1 percent. This was primarily driven by higher expenses for basic chemicals and refined petroleum products, which surged by 13.9 percent and 12 percent, respectively. 

The report also noted a 0.4 percent year-on-year increase in the prices of agricultural and fishery products in August. 

The costs of ores and minerals fell by 3.7 percent in August compared to the same period in 2023, while prices for metal products, machinery, and equipment saw a slight decline of 0.1 percent. 

Prices of food products, beverages, tobacco, and textiles remained largely unchanged during the month. 

Saudi Arabia’s WPI saw a slight monthly increase of 0.2 percent, driven by a 0.2 percent rise in the prices of other transportable goods. 

“Prices of metal products, machinery, and equipment increased by 0.3 percent month-on-month in August, as a result of a 0.9 percent increase in the prices of transport equipment,” said GASTAT. 

The report also said that expenses for food products, beverages, tobacco, and textiles fell by 0.2 percent in August compared to July, driven by a 0.6 percent drop in the prices of meat, fish, fruits, vegetables, oils, and fats, as well as a 0.2 percent decline in dairy product prices. 

The prices of agricultural and fishing products decreased by 0.1 percent, due to a 1.1 percent drop in the cost of live animals and animal products. 

Average prices 

In a separate report, GASTAT highlighted notable shifts in the average prices of goods and services across Saudi Arabia in August. 

The authority reported that prices of local tomatoes surged by 19.54 percent compared to the previous month, while imported tomatoes saw a 9.83 percent increase during the same period. 

Local children’s diapers experienced a month-on-month price rise of 4.94 percent in August, followed by medium local potatoes and Pakistani mangoes, with prices climbing 4.25 percent and 4.08 percent, respectively. 

On the other hand, the price of dates dropped by 10.66 percent in August compared to July, and local figs saw an 8.27 percent decline. 

These reports from GASTAT offer a comprehensive view of the various factors influencing inflation and the cost of living in the Kingdom. 


Saudi Arabia secures over half of MENA startup funding in September

Updated 49 min 43 sec ago
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Saudi Arabia secures over half of MENA startup funding in September

  • Investors express confidence in Saudi entrepreneurial talent by pouring $165 million into 13 firms
  • Fintech emerged as the leading sector in September, attracting $134.84 million

RIYADH: The startup ecosystem in the Middle East and North Africa is experiencing significant growth, with Saudi Arabia emerging as a key driver of funding activity.

According to a recent report by Rasmal, MENA startups raised a total of $328.3 million across 60 companies in September, reflecting increasing investor confidence in the region’s entrepreneurial talent.

This surge in funding highlights MENA’s expanding role in the global startup landscape, fueled by government initiatives and a rising appetite for risk and innovation in the private sector.

Saudi Arabia led the regional funding efforts, securing $165.34 million across 13 startups — accounting for more than half of the total capital raised in MENA. This significant investment underscores the Kingdom’s strategic economic diversification goals outlined in Vision 2030, which aims to reduce dependence on oil and foster growth in technology and innovation sectors.

Cities like Riyadh and Jeddah are emerging as key startup hubs, supported by government initiatives and increasing private investment that contribute to a robust ecosystem for entrepreneurial growth.

Government programs, including the Public Investment Fund and various venture-focused initiatives, have been instrumental in driving this transformation. The Saudi government’s proactive stance has attracted private investment, with venture capital firms, accelerators, and incubators keen to nurture local talent.

FASTFACTS

  • MENA startups raised $328.3 million across 60 companies in September.
  • Saudi cities like Riyadh and Jeddah are emerging as key startup hubs supported by government initiatives.
  • The UAE has emerged as another significant player in the MENA startup ecosystem, raising $114.32 million across 28 companies.
  • Egypt attracted $25.09 million, primarily focused on technology and innovation sectors.
  • Countries like Bahrain, Oman, and Morocco are also gaining investor interest, albeit on a smaller scale compared to regional leaders.

These efforts are fostering an enabling environment for startups across diverse industries such as technology, logistics, healthcare, and energy, laying the foundation for sustainable long-term growth.

The UAE has emerged as another significant player in the MENA startup ecosystem, raising $114.32 million across 28 companies. Dubai, in particular, continues to attract investors due to its business-friendly policies and status as a global gateway.

In September, sectors like fintech, e-commerce, and property technology saw substantial investments, reinforcing the UAE's commitment to becoming a leader in financial technology. Initiatives such as the Dubai International Financial Centre Innovation Hub have been pivotal in attracting both funding and talent to the region.

This growth underscores the UAE’s efforts toward economic diversification, reducing dependence on oil and positioning itself as a resilient, innovation-driven economy. The variety of sectors receiving investments further highlights the country’s comprehensive growth strategy to build a sustainable and diversified future.

While Saudi Arabia and the UAE led the funding landscape, other countries in the region also showed promise. Egypt attracted $25.09 million, primarily focused on technology and innovation sectors.

Cairo’s startup ecosystem has benefited from government initiatives designed to support small and medium enterprises, providing essential infrastructure for early-stage companies. This growth occurs amid significant economic challenges, as Egypt faces turbulence due to weakening monetary policies.

Countries like Bahrain, Oman, and Morocco are also gaining investor interest, albeit on a smaller scale compared to regional leaders. Bahrain’s emphasis on fintech and Oman’s investments in logistics and e-commerce signal these nations’ intent to establish their presence in the regional ecosystem. However, challenges remain in countries like Iraq and Kuwait, where political instability and regulatory barriers hinder the attraction of venture capital, resulting in an uneven distribution of funding across the region.

According to the Rasmal report, fintech emerged as the leading sector in September, attracting $134.84 million. This strong focus underscores the region's rapid adoption of digital financial solutions and the increasing demand for technology-driven banking services. Governments and businesses are prioritizing financial inclusion, which is driving further growth in the sector.

Logistics technology also attracted significant attention, driven by the ongoing e-commerce boom. As consumer preferences shift toward online shopping, the need for efficient supply chain solutions has grown. SHIFT, a logistics technology company, secured the largest investment of the month with $83 million, highlighting the growing importance of infrastructure to support e-commerce and evolving supply chain demands in MENA.

In September, late-stage startups garnered the majority of funding, securing $129.08 million of the total amount raised. This trend indicates a growing preference among investors for ventures that have demonstrated market success and scalability.

Given global economic uncertainties, late-stage startups with proven business models are often viewed as safer investments. Nevertheless, early-stage companies continue to play a vital role in the ecosystem, with seed-stage startups raising $57.30 million across 33 deals, reflecting ongoing interest in nurturing new ideas and emerging businesses.

The presence of government-backed incubators and accelerators remains crucial in supporting early-stage companies, providing mentorship and infrastructure to facilitate growth. However, the Rasmal report highlighted a significant gender disparity in funding: male founders secured 96.79 percent of the funds raised in September, while female founders received only 3.21 percent. This imbalance underscores the ongoing challenges faced by female entrepreneurs in accessing venture capital.

Addressing this gap will require a more inclusive investment approach, with increased support for women-led startups. Initiatives like the TiE Women MENA Programme are working to promote gender inclusivity, but more action is needed to foster a balanced and diverse entrepreneurial landscape across the region.

Among the notable startups funded in September were Syarah, an online car sales marketplace that raised $40 million, and TON, a fintech firm that secured $30 million. These companies illustrate the diversity of sectors gaining traction, from automotive e-commerce to financial services, showcasing the breadth of opportunities for investors in the MENA region.

Overall, the MENA startup ecosystem is well-positioned for continued growth, driven by investor interest in key markets and favorable government policies. However, rising geopolitical tensions may impact this growth trajectory. The focus on fintech and logistics is likely to persist, aligning with the region’s broader digital transformation. Simultaneously, other industries, such as healthtech and renewable energy, are expected to grow, reflecting shifting priorities and emerging opportunities.

Challenges, including the gender funding gap and difficulties in attracting venture capital in certain countries, remain significant. Nonetheless, ongoing efforts by governments, investors, and entrepreneurs to foster innovation are likely to gradually address these issues.


Oman’s broad money supply surges 13.3%

Updated 06 October 2024
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Oman’s broad money supply surges 13.3%

  • Climb mainly attributed to 16.5% increase in narrow funds and 12.1% in quasi-money
  • Sultanate’s public revenue saw an annual decline of 2% year on year in the second quarter of the year, reaching $16.1 billion

RIYADH: An increase in Oman’s narrow money led the country’s broad capital supply to grow 13.3 percent year-on-year to reach 24.2 billion Omani rials ($62.6 billion) by the end of July.

Statistics issued by the Central Bank of Oman showed this climb was mainly attributed to a 16.5 percent increase in narrow funds and 12.1 percent in quasi-money. 

This consists of total savings deposits and time deposits in Omani rials, certificates issued by financial institutes, margin accounts, and all foreign currency reserves in the banking sector.

The growth in figures suggests vibrant and expanding economic activity, with more funds circulating within the economy. 

It comes as Oman’s public revenue saw an annual decline of 2 percent year on year in the second quarter of the year, reaching $16.1 billion, the country’s news agency reported in August. 

The sultanate’s economic landscape is heavily influenced by its reliance on oil and gas revenues, making it vulnerable to global price fluctuations. 

The government has been actively working to diversify the economy and reduce dependence on hydrocarbons as part of its Vision 2040 plan. 

The figures further revealed that cash in the hands of the public decreased by 5.2 percent by the end of last July, while demand deposits increased by 22.8 percent, the Oman News Agency reported.


Saudi Arabia offers October ‘Sah’ sukuk savings products with over 4.9% return 

Updated 57 min 48 sec ago
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Saudi Arabia offers October ‘Sah’ sukuk savings products with over 4.9% return 

  • Investors will receive bond allocations on Oct. 15, with the redemption period spanning four days starting Oct. 20
  • Subscriptions start at a minimum of SR1,000 per bond, with a maximum limit of SR200,000

JEDDAH: Saudi Arabia has launched its October subscription for the subscription-based savings product, Sah, offering a 4.92 percent return to promote financial stability and growth among citizens. 

The Shariah-compliant, government-backed sukuk issuance began at 10:00 a.m. Saudi time on Oct. 6 and will close at 3:00 p.m. on Oct. 8, as announced by the National Debt Management Center. 

Investors will receive bond allocations on Oct. 15, with the redemption period spanning four days starting Oct. 20. Redemption amounts will be disbursed seven days later. 

Subscriptions start at a minimum of SR1,000 ($266.66) per bond, with a maximum limit of SR200,000, allowing for the purchase of up to 200 bonds. 

Issued by the Ministry of Finance and organized by the NDMC, the fee-free savings products offer low-risk returns and are distributed through the digital channels of approved financial institutions. 

Sah is Saudi Arabia’s first government sukuk designed to foster saving habits by encouraging citizens to set aside a portion of their income regularly. The initiative supports the Financial Sector Development Program, part of Vision 2030, which aims to raise the national savings rate from 6 percent to 10 percent by 2030. 

Saudi nationals aged 18 and above can invest in Sah through SNB Capital, Aljazira Capital, and Alinma Investment, as well as SAB Invest, or Al Rajhi Bank. The bonds are issued monthly, with a one-year savings period and fixed returns, paid out upon maturity. 

In September, the NDMC successfully allocated SR2.603 billion in sukuk. In a detailed statement, the authority outlined the distribution of the sukuk into six tranches. 

The first tranche comprised SR255 million, set to mature in 2027, while the second tranche secured SR375 million for bonds maturing in 2029. 

The third tranche reached SR638 million for Islamic bonds maturing in 2031, followed by the fourth tranche totaling SR1.021 billion, with maturity set for 2034. 

Moreover, the fifth tranche encompassed SR202 million for sukuk maturing in 2036, and the final tranche accounted for SR112 million, set to mature in 2039. 

As demand for such low-risk investment options continues to rise, it demonstrates the evolving preferences of individuals seeking stable, Shariah-compliant savings opportunities, further enhancing financial inclusion in the Kingdom.


Qatar’s non-energy sector growth stable despite PMI dip

Updated 59 min 16 sec ago
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Qatar’s non-energy sector growth stable despite PMI dip

  • The 12-month outlook for activity strengthened in September to the highest since March 2023
  • Non-energy private sector workforce expanded at the fastest rate on record

RIYADH: Non-oil business activities in Qatar were steady in September, even as the country’s Purchasing Managers’ Index dropped to 51.7 from 53.1 in August, an economy tracker showed. 

The latest report released by Qatar Financial Center compiled by S&P Global said that the PMI readings for September indicate the country’s sustained growth in the non-energy private sector. 

According to the credit rating agency, any PMI readings above the 50 mark indicate expansion of business activities, while below signifies contraction. 

Strengthening the non-hydrocarbon sector is crucial for Qatar, as the country is on a path of economic diversification by reducing its reliance on oil. 

Under the National Vision 2030, Qatar aims to gradually lessen its dependence on hydrocarbon industries and enhance the role of the private sector to drive the country’s growth further. 

“Although the headline PMI eased in September, on the whole, the latest survey results show a number of positive developments for the Qatari non-energy economy,” said Yousuf Mohamed Al-Jaida, CEO of QFC Authority. 

“The pause in overall growth of output wholly reflected the construction sector, with growth sustained in manufacturing, services, finance, wholesale, and retail,” he added. 

“There was a series-record increase in employment during the month as firms sought to expand capacity to address rising backlogs,” Al-Jaida also said. 

According to the S&P Global analysis, the 12-month outlook for activity strengthened in September to the highest since March 2023 as demand for goods and services continued to increase, leading to a build-up in outstanding business. 

The rating agency attributed this positive outlook among Qatari firms to economic development, a rising population, and investment in key sectors, including construction, real estate, and tourism. 

“The 12-month outlook continued to brighten, as firms mentioned investment in key sectors such as construction, real estate and tourism. September data also showed a record increase in wages, which should boost consumer demand,” said Al-Jaida. 

The survey revealed that the non-energy private sector workforce expanded at the fastest rate on record, surpassing the previous peak set in January 2019. 

Although new business rose and the outlook improved, purchasing activity softened slightly as firms reported broadly stable inventory holdings. 

The report added that September witnessed a further acceleration in demand growth for Qatari financial services. 

“The seasonally adjusted Financial Services New Business Index rose to 64.1, from 62.8 in August, signaling a rapid improvement in demand conditions with the fastest growth since August 2022,” said S&P Global. 


Saudi Arabia’s e-commerce sector sees 9.4% growth in Q3

Updated 06 October 2024
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Saudi Arabia’s e-commerce sector sees 9.4% growth in Q3

  • Riyadh led with 16,274 registrations, followed by Makkah with 10,023, and the Eastern Province with 6,328
  • Commercial sector has seen a 62% increase in the issuance of commercial records in the third quarter

RIYADH: Saudi Arabia’s e-commerce sector continues its upward momentum, with 39,769 businesses registered in the third quarter, a 9.4 percent increase year on year. 

The latest data from the Ministry of Commerce revealed that Riyadh led with 16,274 registrations, followed by Makkah with 10,023, and the Eastern Province with 6,328. 

In the Madinah and Qasim regions, e-commerce registrations reached 1,897 and 1,302, respectively. 

The growth highlights the Kingdom’s ongoing transition toward a diversified, digitally-driven economy, with e-commerce playing a crucial role. Saudi Arabia now ranks among the top 10 countries globally in e-commerce expansion. 

The commercial sector has seen a 62 percent increase in the issuance of commercial records in the third quarter compared to the same period last year, according to the Ministry of Commerce’s latest quarterly report. 

The capital led the list with 53,150 registrations, followed by Makkah with 24,482, and the Eastern Province with 19,840. The Qassim and Asir regions recorded 6,973 and 6,542 registrations, respectively. 

A total of 135,909 commercial records were issued over the past three months, bringing the overall number of active commercial records in the Kingdom to more than 1.5 million. 

The ministry’s quarterly business sector bulletin provides an overview of the latest developments in the Kingdom’s commercial environment, highlighting the continued growth and diversification of Saudi Arabia’s economy. 

The report also introduced five key regulatory systems to enhance confidence in the business landscape. 

These regulatory systems include the Commercial Register System, Trade Names System, and Product Safety System. They also encompass the Standards and Quality System and the Measurement and Calibration System. 

The bulletin also underscored significant growth across various promising sectors, aligning with Saudi Arabia’s Vision 2030 goals. 

Notable expansions were observed in several key fields, including financial technology, artificial intelligence, and electronic gaming. 
Growth was also seen in financial and insurance activities, as well as sports and entertainment education. 

Other areas of expansion included sports clubs, tourism organizations, and relaxation centers. 

Market research and opinion polling sectors also experienced significant progress. 

These developments reflect the Kingdom’s strategic focus on fostering innovation and sustainable growth across diverse industries. 

In the fintech solutions sector, the number of registered companies in Saudi Arabia climbed 27 percent in the third quarter compared to the same period last year, reaching 3,593. 

Riyadh led with 2,224 registrations, followed by Makkah with 721, and the Eastern Province with 361. The Madinah and Qassim regions recorded 101 and 52 registrations, respectively.