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Kerala Kaumudi Online
Monday, 17 June 2024 2.47 AM IST

Rent and grocery prices skyrocket in this Middle Eastern nation as expats struggle to make ends meet

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The cost of living in the Middle East nation of Saudi Arabia is rising due to a rise in inflation. Officials have confirmed that inflation in the country has increased in the month of January compared to December last year. This is a big hit for the people there, including expatriates.

Inflation rose from 1.5 percent in December 2023 to 1.6 percent in January 2024. The rise in the prices of essential commodities and consumer goods in the country has led to inflation.

A 7.8 percent increase in the prices of housing, water, electricity, gas, fuel etc. has been recorded during this period. The latest figures of the country have been released by the General Authority for Statistics.

An increase of 8.2 percent was recorded in the building rent last month. Food and beverage prices rose 1 percent year-on-year as vegetable prices jumped 3.7 percent. Restaurants and hotels also recorded a 2.4 percent increase in prices. All this has a negative effect on the monthly budget of expatriates.

At the same time, transport costs fell by 1.1 percent, with vehicle prices falling by 2.7 percent. Riyadh, Jeddah, Abaha, Buraida and Hail are the most expensive cities in Saudi Arabia. Cities with low cost of living include Makkah, Taif, Al Hofuf, Tabuk, Jizan and Al Baha.

There were earlier reports that Saudi Arabia is facing a setback in its economy. In the fourth quarter of the financial year, the country's GDP faced a decline of 3.7 percent compared to the same quarter last year.

The government states that the main reason for this is the decline in revenue from oil sales. The government's statistics authority confirms this.

The statistics authority explained that oil revenues fell by 16.4% year-on-year, but non-oil and government revenues increased by 4.3% and 3.1% respectively. Saudi Arabia's total GDP has decreased by 0.96% in 2023 compared to 2022.

The Saudi Ministry of Finance had said in December that the country's real GDP would grow by 0.03 percent in 2023. The ministry has estimated a 4.4% growth in GDP by 2024.

Saudi Arabia could produce 12 million barrels of crude oil, but currently produces only 9 million barrels. This is due to the increase in oil production by non-OPEC countries such as the United States and Brazil.

Saudi sees the solution to the problem is to become an oil-based economy. The new goal is to diversify Saudi's oil-based economy and develop the country as a tourism hub in the Middle East.

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