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Saudi Arabia saves SAR26.25 billion annually from raising energy prices

Energy subsidies reform expected to accelerate inflation in housing, electricity, water and transportation

Saudi government will save up to SAR26.25 billion per year from raising energy prices, according to a specialised economic report.

The report expected the increased prices as a result of a recent decision to reform energy subsidies to accelerate inflation in housing, electricity, water and transportation, reports UAE-based Aliqtisadi.

The report, issued by Jadwa Investment Company, explained that the Saudi government during 2016 would make more efforts to reduce the withdrawal of foreign reserves, which fell at SAMA by roughly SAR45bn in November and reached SAR2.37 trillion.

At the same time, the Kingdom’s current account recorded the first deficit since 1998, amounting to SAR161bn, the equivalent of 6.3 per cent of GDP.

The report pointed to recent data published by the Department of Statistics and Information, which showed a slowdown in the Kingdom’s actual GDP growth.

While most of the private non-oil sectors of the economy recorded a decline on an annual basis, the growth in the services sector accelerated.

(SAR1 = AED0.98, at the time of publishing)