RIYADH: Saudi Arabia’s money supply increased by 5.6% year on year in August, while consumer price inflation was 1.8%, indicating that monetary expansion will continue under relatively restrained pricing pressures, according to official data.
The Saudi Central Bank, generally known as SAMA, reported that bank lending to the private sector jumped 6.1 percent year on year in August, while bank claims on the government increased 9.4 percent. The monetary data come as the International Monetary Fund predicts Saudi Arabia’s real GDP growth will drop to 1.7 percent in 2026 before rising to 5.5 percent in 2027.
The IMF stated the worse near-term prognosis reflects the impact of the Middle East war, impediments to shipping via the Strait of Hormuz, and the possible repercussions on oil exports, non-oil activity, and business confidence.
The fund anticipates non-oil GDP growth to reach 2.6 percent in 2026, then accelerate to 4.5 percent in 2027. The average consumer-price inflation rate is expected to grow to 2.2 percent this year from 2 percent in 2025. According to the IMF, the prognosis is still highly uncertain and will be heavily influenced by the course of the conflict and if marine commerce via the Strait of Hormuz resumes normal operations.
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