Saudi Arabia Inflation Holds at 1.8% for Fourth Consecutive Month

Saudi Arabia’s annual inflation rate remained at 1.8 percent in August for the fourth consecutive month, with housing, food and transport costs continuing to push consumer prices higher, according to official data.

The General Authority for Statistics (GASTAT) said the Consumer Price Index increased 0.1 percent in August from July. The annual inflation rate was unchanged from the previous month, keeping price growth relatively contained compared with several other countries in the region.

Housing, water, electricity, gas and other fuels recorded the largest annual increase among major spending categories, rising 3.9 percent. Food and beverage prices increased 1.4 percent, while transport costs rose 2 percent.

GASTAT said the housing category was the biggest contributor to annual inflation, adding 0.8 percentage points to the overall rate. Food and beverages contributed 0.3 percentage points, while transport also added 0.3 percentage points.

Housing costs increased mainly because actual rents rose 3.9 percent year on year. The Saudi government has taken measures to address rising rental costs, including a five-year freeze on annual rent increases for new and existing residential and commercial contracts within Riyadh’s urban boundaries that began last year.

Personal care, social protection and other goods and services recorded the second-highest annual increase, rising 3.5 percent. Other personal effects rose 13.3 percent, supported by a 14.4 percent increase in jewellery and watch prices.

Recreation, sport and culture prices increased 2.8 percent, with holiday package prices rising 4.7 percent.

Some categories recorded annual declines. Furniture, home appliances and routine household maintenance prices fell 0.6 percent, while clothing and footwear prices declined 0.5 percent.

Monthly price movements were mixed. Personal care and related services rose 0.8 percent, transport increased 0.6 percent and insurance and financial services gained 0.5 percent. Housing costs edged up 0.2 percent.

Food and beverage prices fell 0.1 percent from July, while restaurants and accommodation services declined 0.4 percent.

Separate GASTAT data showed sharp movements in individual food prices during August. Local onion prices rose 17.9 percent from July, while imported onions increased 11.6 percent. Local tomatoes recorded the biggest monthly decline, falling 15.2 percent.

Saudi Arabia’s Wholesale Price Index also eased, with annual growth slowing to 4.6 percent in August from 5 percent in July. The increase was driven partly by an 8.2 percent rise in other transportable goods, including a 51.4 percent jump in basic chemical prices.

Producer prices, based on the latest available July data, increased 5.3 percent annually. Manufacturing prices rose 5.5 percent, while water supply, sewerage and waste management prices increased 6.8 percent. On a monthly basis, however, producer prices fell 2.8 percent, mainly because of lower manufacturing and refined petroleum product prices.

Saudi Arabia’s inflation remains below rates recorded in Oman and Jordan, where annual inflation reached 3.4 percent and 2.66 percent respectively in August.