Saudi prices to continue a downward trend to adjust with VAT and structural reforms in the labour market, says Jadwa Investment
Interest rates in Saudi Arabia are forecast to slow to about 1.1 percent in 2019, as prices are set to continue a downward trend to adjust with VAT and the structural reforms in the labour market, according to Jadwa Investment.
In its latest research note, Jadwa said prices rose by 2.4 percent year-on-year in October, and declined by 0.3 percent month-on-month, citing data from the General Authority for Statistics (GaStat).
Since the start of the year, prices have risen by an average of 2.5 percent year-to-October, despite the introduction of VAT and utility and fuel price reform at the turn of the year, it said.
It added that Food and beverages prices rose by 6.3 percent year-to-October, with main price rises coming from fish, bread and cereals.
Housing and utilities prices were marginally down by 0.7 percent year-to-October, likely to be due to the impact of rentals for housing which declined by an average of 2.9 percent year-to-October.
Jadwa said Transportation prices saw the highest growth rate of 10.5 percent, after Tobacco.