Table of Contents

Section Page No.

Consumer Price Index (CPI) 3

Developments in Q3 2019 3

Effect of Sections on Consumer Price Index 3

Wholesale Price Index (WPI) 5

Wholesale Price Index by Section 6

GDP Deflator 6

Foreign Trade with Major Trading Partners 8

Inflation Projections for Q4 2019 9

Summary 10

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Consumer Price Index (CPI)
The consumer price index (CPI) reg-
istered a y/y decline of 1.1 percent in Q3
2019 and a q/q increase of 0.4 percent com-
pared to the second quarter of 2019 (Table
1 and Chart 1).
1.3 percent; furnishings, household equip-
ment and maintenance with 1.2 percent;
health with 1.0 percent; and food and bev-
erages with 0.8 percent; while tobacco re-
mained unchanged (Table 1 and Charts 2
and 3).

Developments in Q3 2019 Effect of Sections on the Consumer Price

During Q3 2019, housing, water,
electricity, gas and other fuels registered
the highest y/y decrease of 6.3 percent; fol-
lowed by communication with 0.6 percent;
clothing and footwear with 0.5 percent; and
recreation and culture with 0.1 percent.
In contrast, miscellaneous goods and
services registered the highest y/y inflation
rate of 1.9 percent. Education came second
with 1.6 percent, followed by restaurants
and hotels with 1.5 percent; transport with
Index
Inflation rates are affected by the
changes in CPI’s various sections. Classi-
fied by their influence on the CPI, housing,
water, electricity, gas and other fuels
ranked first with 67.7 percent during Q3
2019 against 11.5 percent y/y. Food and
beverages ranked second with 6.0 percent
compared to 29.4 percent y/y, followed by
transport with 5.8 percent compared to 24.8
percent y/y; miscellaneous goods and ser-

TABLE 1:Consumer price index

(2013=100)
(%) change
————————————

2019Q3 / 2019Q3 /
Weights 2018Q3 2018Q4 2019Q1 2019Q2 2019Q3
2019Q2 2018Q3

General index 100.0 107.3 106.5 105.7 105.7 106.1 0.4 -1.1
Food & beverages 18.7 107.0 107.3 106.7 107.0 107.8 0.7 0.8
Tobacco 0.6 192.0 192.1 192.6 192.3 192.0 -0.1 0.0
Clothing & footwear 6.2 92.9 92.5 92.3 92.7 92.3 -0.4 -0.5
Housing, water, electricity, gas & other
25.3 109.4 106.9 104.5 103.2 102.6 -0.6 -6.3
fuels
Furnishings, household equipment &
8.5 102.6 102.4 102.4 102.6 103.8 1.2 1.2
maintenance
Health 2.3 110.4 110.3 110.4 110.7 111.6 0.8 1.0
Transport 9.9 119.4 119.1 118.7 119.9 121.0 0.9 1.3
Communication 8.4 100.3 100.0 99.8 99.7 99.7 0.0 -0.6
Recreation & culture 3.4 97.1 96.5 96.0 95.7 97.0 1.3 -0.1
Education 4.2 110.2 110.7 111.0 111.4 112.0 0.5 1.6
Restaurants & hotels 6.5 112.1 111.8 112.0 112.7 113.8 0.9 1.5
Miscellaneous goods & services 5.7 102.9 102.2 102.3 102.8 104.9 2.0 1.9
Source: General Authority for Statistics.

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 Chart 1: Inflation Rate of the General Cost of Living Index
(2013=100)
5.00 3.9
4.20
3.40
2.60 2.2 2.4
1.80 2.9
2.3
1.00 0.4
-0.1 -0.5 0.0
0.20
-1.0 -0.7 -0.7
-0.60
-0.2
-1.40 -1.1
-0.8 -2.1
-2.20 -1.3 -1.6
-3.00
Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019

Annual Inflation Rate Quarterly Inflation Rate

Source: General Authority for Statistics

Chart 2: Inflation Rate of the Consumer Price Index by Main Sections (Q3 2019/Q2 2019)

0.4 General index

0.7 Food & beverages
-0.1 Tobacco
-0.4 Clothing & footwear
-0.6 Housing, water, electricity, gas & other fuels
1.2 Furnishings household equipment & maintenance
0.8 Health
0.9 Transport
0.0 Communication
1.3 Recreation & culture
0.5 Education
0.9 Restaurants & hotels
2.0 Miscellaneous goods & services

%
-5

Source: General Authority for Statistics

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 Chart 3: Quarterly Inflation Rate of the General Consumer Price Index and the Most Major Sections
(%) Affecting it
15
12
9
6
3
0
-3
-6
-9
-12
Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019

General index Housing, water, electricity, gas & other fuels

Food & beverages Transport
Miscellaneous goods & services Clothing & footwear
Source: General Authority for Statistics

vices with 4.6 percent compared to 0.5 per- and transport) stood at 79.5 percent in Q3
cent y/y; furnishings, household equipment 2019 against 65.7 percent in Q3 2018
and maintenance with 4.2 percent com- (Charts 4 and 5).
pared to 2.1 percent y/y; and restaurants
and hotels with 4.0 compared to 12.4 per- Wholesale Price Index (WPI)
cent y/y. The wholesale price index in Q3
The total influence rate of the three 2019 recorded a y/y rise of 2.8 percent and
major sections (housing, water, electricity, a q/q increase of 1.0 percent (Chart 6).
gas and other fuels; food and beverages;

CHART 4: Percentage Impact Of Major Sections On The CHART 5: Percentage Impact Of Major Sections On The
General Inflation Rate (Q3 2018) (%) General Inflation Rate (Q3 2019) (%)
Clothing &
Miscellaneous Food & Tobacco; 1.4 footwear; 11.3 Housing,
goods & beverages; water,
services; 0.5 29.4 Housing, electricity, gas
water, & other fuels;
electricity, gas Clothing &
67.7 Furnishings,
& other fuels; footwear; 1.5
household
Restaurants & 11.5 Tobacco; 0.0
equipment &
hotels; 12.4 Food &
maintenance;
beverages; 6.0
Furnishings, 4.2
Education; 0.4 household Health; 1.0
Miscellaneous
equipment & goods & Transport; 5.8
Recreation & maintenance; services; 4.6
culture; 1.2 Communicati…
2.1 Communication;
Restaurants &
Transport; Recreation & 2.1
Health; 2.2 hotels; 4.0 Education; 2.9
24.8 culture; 0.2

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 Chart 6: Inflation of the Wholesale Price Index y/y decrease of 0.7 percent. On the other
(2014=100) hand, machinery and equipment recorded a
Quarterly Inflation Rate Annual Inflation Rate y/y increase of 6.1 percent, followed by
other goods with 2.3 percent (Table 2 and
18.0
16.0 Chart 7).
14.0 15.7 16.1
12.0
10.0
8.0 GDP Deflator
6.0
4.0 1.8 2.8 According to the latest data issued by the
2.0 0.0 -0.3
0.1 GaStat, the GDP deflator recorded a y/y de-
0.0
-2.0
-4.0 -0.1 1.8 1.0 crease of 0.3 percent in Q2 2019 and a q/q
-6.0
-8.0
rise of 5.9 percent.
-10.0 Unlike the CPI, which only measures the
2018Q3 2018Q4 2019Q1 2019Q2 2019Q3
final consumption, GDP deflator measures
inflation rate at the macroeconomic level—
Source: General Authority for Statistics
it targets all consumption, investment and
government sectors based on their respec-
Wholesale Price Index by Section tive contributions to the GDP. Therefore,
During Q3 2019, ores and minerals the deflator is considered an indirect meas-
registered the highest y/y decrease of 2.3 ure of the change in the general level of
percent. Agriculture and fishery products prices. The non-oil GDP deflator is com-
ranked second with a y/y decrease of 1.3 monly used to exclude the impact of
percent. Food products, beverages, and to- change in oil prices on the domestic econo-
bacco as well as textiles came next with a

TABLE 2: Wholesale price index (WPI)

(2014=100)
(%) change
————————————

Weights 2018Q3 2018Q4 2019Q1 2019Q2 2019Q3 2019Q3 / 2019Q2 2019Q3 / 2018Q3

General Index 100.0 116.7 116.9 116.7 118.8 120.0 1.0 2.8
Agricuture and fishery products 8.7 102.9 101.7 99.1 99.7 101.6 1.9 -1.3
Ores and Minerals 0.6 99.6 98.2 98.1 97.8 97.3 -0.5 -2.3

Food products,beverages and tobacco and textiles 17.3 108.2 107.8 107.4 107.6 107.4 -0.2 -0.7

Other goods 33.7 143.6 145.0 143.0 144.6 146.9 1.6 2.3
Metal products, machinery and equipment 39.7 100.8 100.5 102.5 106.3 107.0 0.7 6.1

Source:General Authority for Statistics.

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 Chart 7: Inflation of the Wholesale Price Index by Main Sections
(2014 = 100)
%Change (Q3 2019/ Q3 2018) Annual & Monthly Inflation of the WPI

General Index 2.8

3.5

Agricuture and fishery products -1.3 3.0

2.5
Ores and Minerals -2.3
2.0

Food products,beverages and tobacco and 1.5

textiles -0.7
1.0

Other goods 0.5

2.3
0.0
Apr-19 May-19 Jun- 19 Jul-19 Aug -19 Sep-19
Metal products, machinery and equipment 6.1 Monthly Inf latio n Rate Annual Inflatio n Rate
Source: General Authority for Statistics

my. It registered a q/q rise of 4.1 percent in ic activity shows that construction and build-
Q2 2019 and a y/y increase of 0.1 percent ing registered the highest y/y rise of 4.7 per-
(Table 3 and Chart 8). cent in Q2 2019. Wholesale and retail trade,
An analysis of GDP deflator data (at con- restaurants and hotels; and community, social
stant prices for base year 2010) by econom-

TABLE 3: GDP Deflator

(2010=100)

Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2* 2019

—— —— —— —— ——
GDP (Million Rls):
At Current Prices 738,851 745,062 766,354 718,543 740,032
At Constant Prices 639,851 654,372 686,990 660,685 642,779
GDP Deflator 115.5 113.9 111.6 108.8 115.1
Quarterly Change (%) 7.3 -1.4 -2.0 -2.5 5.9
Annual Change (%) 16.4 12.8 8.4 1.1 -0.3

Non-oil GDP (Million Rls):

At Current Prices 484,219 479,723 501,134 496,371 499,150

At Constant Prices 357,845 360,475 386,690 381,371 368,350
Non-oil GDP Deflator 135.3 133.1 129.6 130.2 135.5
Quarterly Change (%) 5.5 -1.7 -2.6 0.4 4.1
Annual Change (%) 6.1 2.2 4.7 1.4 0.1
* Latest Available Data Source: General Authority for Statistics.

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 Chart 8: Quarterly & Annual Changes of the Non-oil GDP
( ) (2010=100)
8 6.1
6 4.7 4.1
2.2 1.4
4
5.5
2
0
-2 0.4 0.1
-4 -1.7
-2.6
-6
-8
Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2* 2019

Annual Change (%) Quarterly Change (%)

* Latest Available Data Source: General Authority for Statistics

and personal services came second with 1.0 percent; and agriculture, forestry and fish-
percent for each; followed by transporta- ing with 0.6 percent (Chart 9).
tion, storage and communications with 0.9 A comparison of the annual inflation
measures in the domestic market indicates
Chart 9: GDP Deflator by Type of Economic Activity at 2010 Constant Prices that the annual inflation rate of non-oil
Q2 2019*/ Q2 2018 (%) Change
GDP deflator registered a y/y increase of
0.1 percent in Q2 2019. The annual change
0.6 Agriculture , Forestry & Fishing rate of the wholesale price index increased
-3.0 Mining & Quarrying by 1.8 percent, while the annual inflation
-3.1 a) Crude Oil & Natural Gas rate of the consumer price index registered
0.3 b) Other Mining & Quarrying Activites
a decline of 1.6 percent during the same pe-
-0.4 Manufacturing
riod (Chart 10).
-2.3 a) Oil Refining

0.3 b) Other Industries

-0.2 Electricity , Gas and Water Chart 10: Inflation Measurements in Q2, 2019
4.7 Construction Change(% )
1.0 Wholesale & Retail Trade, Restaurants & hotels
3
0.9 Transport , Storage & Communication

-0.6 Finance , Insurance , Real Estate & Business Services 1.8

-1.3 a) Hausing Ownership

0.8 b) Others 1
1.0 Community , Social & Personal Services 0.1
0.9 Minus Imputed Bank Services Charge

-0.2 Sub - Total -1

-0.9 B. Producers of Government Services

-0.3 Total Excluding Import Duties -1.6

0.3 Import Duties
-3
-0.3 Gross Domestic Product
Cost of Living Index Wholesale Price Index Non-oil GDP Deflator

*Latest Available Data Source: General Authority for Statistics

SourceGeneral Authority for Statistics

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Foreign Trade with Major Trading creasing by 23.3 percent y/y. Japan came
Partners fourth with SAR 1.8 billion (4.9 percent of
According to data of August 2019, the the total), rising by 42.9 percent y/y, fol-
total value of Saudi Arabia’s imports stood at lowed in fifth place by India with SAR 1.8
SAR 36.2 billion, with a y/y decrease of 2.8 billion (4.9 percent of the total), increasing
percent. Moreover, Saudi Arabia’s imports by 29.9 percent y/y (Table 4 A and 4 B).
recorded a monthly decline of 28.4 percent
compared to the preceding month.
China came at the top of Saudi Arabia’s ma- Inflation Projections for Q3 2019
jor trading partners, according to data of Au- Actual data in Q3 2019 show that in-
gust 2019. Saudi Arabia’s imports from Chi- flation rate recorded a y/y decrease of 1.1
na amounted to SAR 7.1 billion (19.5 per- percent. However, the pace of the annual
cent of the total value of Saudi Arabia's im- decline in inflation is expected to slow
ports), increasing by 31.7 percent y/y. The down during Q4 2019 compared to the
United States came second with SAR 4.3 bil- three previous quarters due to the relative
lion (11.9 percent of the total), dropping by recovery in housing, water, electricity, gas
0.3 percent y/y. The UAE came third with and other fuels, which represent around 25
SAR 2.6 billion (7.3 percent of the total), de- percent of total Consumer Price Index
(CPI) basket weights.

TABLE 4 A: Top Five Trading Partners by value of Imports TABLE 4 B: Top Five Trading Partners by value of Imports
(SAR Million) (SAR Million)
Countries 2017 2018 Change (%) Countries Aug-18 Aug-19 Change (%)

China 76971 81821 6.3 China 5362 7064 31.7

U.S.A 68086 70642 3.8 U.S.A 4345 4330 -0.3
U.A.E 32831 43441 32.3 U.A.E 3440 2640 -23.3
Germany 29797 28306 -5.0 Japan 1261 1803 43.0
India 20176 21322 5.7 India 1366 1775 29.9
Total 227861 245532 7.8 Total 15775 17612 11.6
Ratio to Total 45.10 47.80 6.0 Ratio to Total 42.30 48.60 14.9
Source: General Authority for Statistics. Source: General Authority for Statistics.

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On the other hand, the World Bank’s pro-
jections for the primary commodity price
index (October 2019) show an increase in
deflationary pressures on most of its main
sections for 2019. Its projections show a
decrease in the prices of beverages by 5.3
percent, energy by 14.6 percent, agricultur-
al materials by 4.7 percent, metals by 9.8
percent and food by 4.9 percent (Table 5).
Summary
The most significant results of the
analysis of inflation rates in Q3 2019 in
Saudi Arabia can be concluded as follows:
1- The Consumer Price Index (CPI) regis-
tered a y/y decrease of 1.1 percent in Q3
2019 and a q/q increase of 0.4 percent.
2- Housing, water, electricity, gas and other
fuels registered the highest y/y decrease
rate of 6.3 percent; followed by communi-
cation with 6 percent; clothing and footwear
with 0.5 percent; recreation and culture with
0.1 percent.
3- The wholesale price index in Q3 2019
recorded a y/y rise of 2.8 percent and a q/q
increase of 1.0 percent, metal products, ma-
chinery and equipment recorded the highest
y/y increase with 6.1 percent.
4- The GDP deflator recorded a y/y decline
of 0.3 percent in Q2 2019 and a q/q rise of
5.9 percent.
5- The pace of decrease in the annual rate of
inflation is projected to slow down during
Q4 2019 compared to the three previous
quarters due to the relative recovery in hous-
ing, water, electricity, gas and other fuels,
which represent around 25 percent of total
Consumer Price Index (CPI) basket weights.

TABLE 5: World Bank Commodities Price Indices

(2005=100)
(Percentage changes)
Actual Projections
————————————— ——————————————————
————————————
2016 2017 2018 2019 ———————
2020 2021 2022

Energy -15.0 23.6 27.8 -14.6 3.2 1.8 1.9

Agriculture -0.5 -0.6 -0.3 -4.7 -0.6 1.9 1.9
Food 1.2 0.7 0.2 -4.9 0.1 2.0 1.8
Raw materials -3.7 1.2 0.2 -3.7 -1.5 1.6 1.7
Base Metals -7.2 24.3 6.7 -9.8 -0.5 1.6 1.7
Fertilizers -20.9 -4.5 11.0 -0.6 2.2 2.1 2.2
Beverages -20.9 -4.5 11.0 -0.6 -2.1 2.1 2.2
Source: World Bank

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