Dr. Bandar Al-Jaid, an economic expert, highlighted the stability of goods and services prices in the Kingdom of Saudi Arabia, citing data issued by the General Authority for Statistics that shows a slowdown in the pace of rental price increases, particularly those related to housing and water.
Al-Jaid explained that the real estate balancing policy launched by Crown Prince Mohammed bin Salman more than a year ago has contributed significantly to reducing the rise in rental prices.
However, he noted that there are regional disparities in supply and demand, as demand still exceeds supply in some areas. He emphasized that this type of controlled inflation can support companies in developing their projects and accurately forecasting future revenues.
He added that the inflation index for January reached 1.8% compared to 2.1% in December. Despite recording an annual increase in the inflation rate from 1.6% to 1.8%, he praised the stability of prices and rental costs, which are expected to continue over the next five years in line with the goals of the real estate balancing vision.
He also indicated that key factors have driven consumers in major cities to adopt a wait-and-see approach in the market, most notably higher interest rates on real estate financing and anticipation of an increase in products and land supply under the real estate balancing policy. He explained that these shifts are pushing companies to offer more affordable projects that align with consumers’ financial capabilities.
Speaking about imported inflation, Al-Jaid stressed that variables such as the decline in the value of the U.S. dollar and the possibility of interest rate cuts by the Federal Reserve could lead to a temporary rise in inflation levels, particularly in industrial production inputs.
Nevertheless, economic openness to Asian markets such as China and India reduces the impact of higher European goods prices. He underscored the importance of strengthening the industrial base and local production to enhance economic independence.
He also addressed the role of strategies adopted by the Public Investment Fund and government institutions such as the Local Content Authority, which work to support government procurement and prioritize local products.
He noted that this direction significantly contributes to mitigating the effects of global inflation, unless there is a strong preference for consuming specific products that depend on foreign currency pricing against the dollar.
