Saudi Arabia’s inflation rate hits 1.9 percent in December 2024, lowest among G20 countries

Saudi Arabia's annual inflation rate reached 1.9% in December 2024. According to data from the General Authority for Statistics (GASTAT), Saudi Arabia has the lowest inflation rate among the G20 countries.

The Consumer Price Index (CPI) is a crucial indicator, reflecting changes in prices consumers pay for a fixed basket of goods and services, which includes 490 items. This selection is based on the results of the 2018 Household Expenditure and Income Survey. Prices are collected through field visits to various points of sale. Importantly, CPI statistics are released monthly, providing timely insights into inflation trends.

Last week, Saudi Arabia's Minister of Finance, Mohammed Al-Jadaan, approved the annual borrowing plan for the fiscal year 2025, following its approval by the board of the National Debt Management Center (NDMC). The plan outlines the significant progress in the public debt sector during 2024, along with initiatives aimed at strengthening the local debt market, and details the financing strategy for 2025 and its guiding principles.

As part of this plan, the projected financing needs for 2025 are approximately 139 billion Saudi riyals (about $37 billion). This funding is intended to address the projected budget deficit of 101 billion Saudi riyals for the fiscal year 2025, as detailed in the Ministry of Finance's official budget statement. Additionally, it accounts for the repayment of approximately 38 billion Saudi riyals in maturing debt principal during the year.

To enhance the Kingdom's access to diverse debt markets and broaden its investor base, Saudi Arabia is committed to intensifying its efforts in 2025. This includes diversifying local and international funding sources to effectively meet its financial needs. The strategy involves issuing sovereign debt instruments at competitive rates, complemented by robust risk management measures. Furthermore, Saudi Arabia plans to capitalize on market opportunities through private transactions aimed at stimulating economic growth. Potential avenues for financing may include collaborations with export credit agencies, infrastructure project financing, capital expenditure (CAPEX) financing, and exploring new markets and currencies based on current market conditions.

The value of assets held by the Public Investment Fund in Saudi financial markets, both domestically and internationally, achieved a remarkable 37% year-on-year growth at the end of the third quarter of 2024, increasing by nearly 43 billion Saudi riyals. This growth brought the total asset value to 160.087 billion Saudi riyals (approximately $42.6 billion), compared to 117.117 billion Saudi riyals in the same period in 2023. On a quarterly basis, the asset value experienced a significant 10.4% increase, with an estimated gain of 15.120 billion Saudi riyals compared to 144.967 billion Saudi riyals at the end of the second quarter of this year, as reported in the Capital Market Authority's quarterly statistical bulletin for 2024.

The number of subscribers in the financial market also saw a notable increase, adding nearly 528,000 users, representing a 51% rise. This brought the total number of users to 1,570,452, compared to 1,042,484 at the end of the same period last year.