Saudi Inflation Edges Higher as Housing Costs Continue to Rise

Annual inflation in Saudi Arabia rose slightly to 1.8 percent in March compared with the same period last year, driven largely by increasing housing costs, according to new data released by General Authority for Statistics.

The report showed that the rise in consumer prices was led by a 3.9 percent increase in housing, water, electricity, gas and other fuel costs. Rental prices remained a key factor, with actual rents climbing 4.8 percent year on year, reflecting sustained demand for residential properties across the Kingdom.

Other contributors to inflation included transport, which rose 0.9 percent, and restaurant and accommodation services, which increased by 2.2 percent. Prices for personal care and miscellaneous goods recorded one of the sharpest increases, rising 8.2 percent, largely due to a surge in the cost of certain personal products.

Despite these upward pressures, food and beverage prices showed only modest growth, rising 0.3 percent annually. Some categories recorded declines, helping to offset overall inflation. Furnishings and household equipment prices fell by 0.5 percent, while clothing and footwear dropped slightly by 0.1 percent.

On a monthly basis, the consumer price index rose 0.3 percent in March compared to February. The increase was mainly driven by a 0.5 percent rise in food and beverages and a 0.7 percent increase in personal care and miscellaneous goods. Housing-related costs edged up 0.2 percent, while restaurant and accommodation prices rose 0.6 percent. Transport costs, however, declined by 0.2 percent, and prices for education, health and tobacco remained stable.

Saudi Arabia’s inflation trend remains broadly in line with projections by the International Monetary Fund, which expects inflation to hover around 2 percent in 2026. This places the Kingdom close to regional peers such as the UAE, while slightly below forecasts for Qatar.

Separate data on wholesale prices indicated stronger cost pressures at the producer level. The Wholesale Price Index rose 3.3 percent year on year in March, driven by higher prices for transportable goods and basic metals. Agricultural and fishery products also recorded gains, while prices for ores and minerals declined slightly.

Monthly wholesale prices increased by 0.2 percent, reflecting modest rises in industrial and transport-related goods.

The data also highlighted fluctuations in specific food items. Prices for certain fruits saw sharp increases during the month, while vegetables such as cabbage, onions and cucumbers recorded declines.

The latest figures suggest that while inflation in Saudi Arabia remains relatively contained compared to global trends, housing costs continue to play a central role in shaping overall price movements.