Saudi Arabia launches $266m program to promote eco-friendly projects

KARACHI: Khadeeja Manzoor haggled with a vendor at a busy market in Pakistan’s Karachi over the price of vegetables. The sight is not an unusual one in Pakistan, especially during the holy month of Ramadan, where people flock to fruit and vegetable markets in thousands daily to buy food items. 

Muslims break their fast with the evening iftar meal during the holy month of Ramadan, consuming dishes prepared with fruits and vegetables in large amounts. This triggers a surge in consumer spending significantly during the holy month, one that increases sales at grocery stores and marketplaces.

“Our spending increases during Ramadan,” Manzoor, 45, told Arab News. “They (actually) double because though the prices of vegetables have declined a bit, other things have become costlier,” she added. 

Pakistan has long grappled with an economic crisis that saw inflation surge to a historic 38 percent in May 2023. However, the government has since then achieved some economic gains, with the country’s monthly inflation rate dropping to 1.5 percent in February on a year-on-year basis.

Dry fruit seller Wasib Abbasi noted that people spent more on items such as Rooh Afza, a sugary drink considered a staple Ramadan diet, and dates during the holy month. This causes a surge in sales during Ramadan, he added. 

“Our sales remain normal during the first 15 days of Ramadan but significantly increase during the second half,” Abbasi, who runs a store selling dry fruits at the busy Empress Market, told Arab News. 

Financial analyst Muhammad Waqas Ghani agrees the increased demand for food items and the increased inflow of remittances to Pakistan during Ramadan supplements the country’s economic growth. He said Pakistan usually sees a rise of 20 percent in remittances during the holy month every year. 

Remittances are a lifeline for Pakistan’s cash-strapped economy, playing a critical role in stabilizing foreign exchange reserves and supporting its balance of payments. Overseas Pakistanis remitted $3.1 billion in February.

“Ramadan does have a significant economic angle. Demand rises in food, lifestyle, and other areas like footwear,” Ghani, the head of research at JS Global Capital Ltd., a commodities brokerage company, told Arab News. 

During Ramadan, commercial banks also deduct billions of rupees from people’s accounts on account of the annual Islamic charity, Zakat. 

Ghani said the circulation of Zakat funds among the masses also increases their purchasing power, which leads to more consumer spending. 

Atiq Mir, chairman of the All Karachi Tajir Ittehad (AKTI), a body of over 400 trade groups in the southern port city, described Ramadan as the “spring month” for traders and citizens alike in terms of both divine blessings and material gains.

“The way people come to bazaars with their children gives a good look,” Mir said, adding that trade “runs above normal” during the holy month.

“Given the size of its population, Karachi alone is a Rs100 billion market if people came out proportionately for Eid shopping only.”
 

RIYADH: Saudi Arabia’s inflation held firm at 2 percent year on year in February, driven largely by rising housing costs, official data showed.  

According to the General Authority for Statistics, the increase was fueled by an 8.5 percent surge in housing rents, contributing to a 7.1 percent overall rise in the housing, water, electricity, gas, and fuels category. 

The inflation rate remains consistent with Saudi Arabia’s efforts to balance economic growth with price stability as the Kingdom advances its Vision 2030 strategy, which aims to diversify the economy beyond oil.   

The government’s November 2024 budget forecast anticipated inflation to hold steady at 1.9 percent in 2025, up slightly from 1.7 percent in 2024. Meanwhile, the World Bank projected a stable 2.3 percent rate this year, below the Gulf Cooperation Council average. 

“On a monthly basis, the consumer price index in February 2025 recorded relative stability compared to January 2025, rising by 0.2 percent due to the increase of housing, water, electricity, gas, and other fuels section by 0.4 percent, driven by a 0.4 percent increase in actual housing rent prices,” said GASTAT.  

Sector breakdown 

Food and beverage prices saw a modest rise of 1 percent, largely influenced by a 3.7 percent increase in meat and poultry costs. Personal goods and services climbed 3.9 percent, bolstered by a 26.7 percent jump in jewelry prices. 

Restaurant and hotel costs edged up 0.8 percent year on year, while furniture and home equipment prices dropped 2.5 percent. Clothing and footwear prices declined 1 percent, led by a 2.4 percent drop in ready-made clothing. 

Transportation costs also dipped 1.5 percent compared to February 2024. 

On a monthly basis, consumer prices remained stable overall, with food and beverages slipping 0.2 percent. Personal goods and services rose 0.7 percent, while health and tobacco prices held steady. 

Wholesale Price Index  

In a separate report, GASTAT noted that Saudi Arabia’s Wholesale Price Index increased 1.5 percent year on year in February, driven by a 3.4 percent rise in other transportable goods prices and a 3.9 percent increase in agriculture and fishery products. 

Food products, beverages, tobacco, and textiles fell by 0.1 percent year on year, while metal products, machinery, and equipment prices dipped 0.5 percent. Ores and minerals costs dropped 1.9 percent. 

Compared to January, the WPI declined 0.5 percent, led by a 1.4 percent fall in other transportable goods prices, excluding metal products, machinery, and equipment. Food products, beverages, tobacco, and textiles also saw a marginal 0.1 percent drop, while agriculture and fishery product costs rose 1.6 percent.