Saudi Arabia's annual inflation rate rose to 1.5 percent in July compared to the same month last year, driven primarily by a significant increase in housing costs, according to official data from the General Authority for Statistics (GASTAT). The most notable factor contributing to this inflation rate was a 9.3 percent surge in the prices of housing, water, electricity, gas, and other fuels. This category, which holds substantial weight in the consumer price index, particularly actual rents, saw an 11.1 percent year-on-year increase in July, with apartment rental prices rising by 12 percent.
Despite the rise in housing costs, food and beverage prices only saw a modest year-on-year increase of 0.4 percent in July, while transportation costs actually declined by 3.5 percent during the same period. Monthly inflation also rose slightly by 0.1 percent from June to July, driven by a 0.1 percent increase in housing-related expenses, particularly a 1.2 percent rise in actual housing rents.
On the wholesale side, the Kingdom’s Wholesale Price Index (WPI) increased by 3.1 percent in July year-on-year, largely due to significant rises in the prices of basic chemicals and refined petroleum products. However, on a monthly basis, the WPI saw a slight decline of 0.1 percent from June to July, primarily due to a drop in prices for agricultural and fishing products.
GASTAT’s report also highlighted changes in the average prices of various goods and services in Saudi Arabia for July. While some items, such as local melons and green beans, saw significant price increases, others, like local grapes and hotel accommodations, experienced notable declines.
These findings reflect the complex dynamics of inflation and cost of living in Saudi Arabia, with housing costs playing a crucial role in the overall inflation rate amidst a broader backdrop of economic resilience.