Saudi Arabia Reports 2% Inflation in 2025, Driven by Rising Housing Costs

Saudi Arabia’s inflation rate stood at 2 percent in 2025, with rising housing rents remaining the main source of price pressure despite declines across several consumer categories.

According to the Kingdom’s General Authority for Statistics (GASTAT), annual average prices for housing, water, electricity, gas, and other fuels increased by 6.1 percent in 2025. The rise was largely driven by an 8.2 percent increase in actual rents paid by tenants for main residences, highlighting housing as the primary contributor to inflation.

Saudi Arabia’s inflation trajectory aligns closely with projections made by the International Monetary Fund in October 2025, which estimated that the Kingdom would maintain an annual inflation rate of 2.1 percent in 2025 and 2 percent in 2026.

In its report, GASTAT stated: “The annual average inflation for CPI in the Kingdom of Saudi Arabia reached 2.0 percent in 2025, compared to the annual average of 2024.” Alongside housing and utility costs, food and beverage prices increased by 1.1 percent, reflecting their significant weight in the Consumer Price Index basket.

Prices for restaurants and accommodation services also rose, increasing by 1.8 percent during the year. Spending on personal care, social protection, and miscellaneous goods and services grew by 5.1 percent, driven by an 18.6 percent rise in costs for other personal belongings.

In contrast, some categories experienced price declines. Furnishings, household equipment, and routine household maintenance fell by 0.8 percent, while information and communication costs dropped 0.7 percent, influenced by a 6.8 percent decrease in the price of related equipment. Healthcare expenses decreased by 0.2 percent, reflecting a 2.2 percent decline in inpatient therapeutic and rehabilitative services.

GASTAT also released data on the wholesale price index, which recorded an annual average increase of 2 percent in 2025 compared to the previous year. The rise was driven by a 4 percent increase in other transportable goods and a 4.1 percent increase in agriculture and fishery products. Prices for food products, beverages, tobacco, and textiles grew modestly by 0.2 percent, supported by a 1.5 percent rise in grains, starch, and other food items.

Metal products, machinery, and equipment prices edged up by 0.1 percent, while leather, leather products, and footwear increased by 1.1 percent. Conversely, ore and mineral prices declined by 1.2 percent, due to an equivalent fall in stone and sand prices.

The data provides a detailed snapshot of inflation pressures across Saudi Arabia, underlining the ongoing impact of rising housing costs on the Kingdom’s economy and highlighting areas where prices have eased, offering some relief to consumers.