RIYADH: Saudi Arabia’s annual inflation rate held steady at 1.6 percent for the third consecutive month in May, driven by rising housing rents, according to official data.
The General Authority for Statistics report stated that the Consumer Price Index increased due to a 10.5 percent rise in actual housing rents, which included a 14.3 percent surge in apartment rents.
“This increase had a significant impact on maintaining the annual inflation rate for May 2024, due to the substantial weight of this category at 21 percent,” said the authority in the report.
Similarly, costs of food and beverages increased by 1.4 percent, driven by a 6.9 percent rise in vegetable prices.
On the other hand, prices of furnishing and home equipment decreased by 3.8 percent.
Similarly, expenses for clothing and footwear decreased by 4 percent year-on-year in May, while transport costs also decreased by 2.4 percent during the same period.
Monthly inflation
Meanwhile, the monthly inflation rate rose marginally by 0.2 percent in May compared to the previous month, driven by changes in housing prices.
The expenses for housing, water, electricity, gas, and other fuels increased by 0.4 percent month-on-month in May.
The monthly inflation index was also impacted by expenses for food and beverages, which went up by 0.7 percent in May compared to April.
Additionally, expenses for restaurants and hotels edged up by 0.2 percent, while costs for personal goods and services increased by 0.1 percent month-on-month in May.
On the other hand, prices for clothing and footwear dipped by 0.6 percent in May compared to the previous month, while costs for transportation edged down by 0.4 percent.
The report further pointed out that prices of education, furnishing and home equipment, and tobacco products did not show any significant change in May compared to April.
In May, a report released by Riyad Capital revealed that Saudi Arabia’s inflation rate is expected to average around 2 percent in 2024, with a moderate acceleration to 2.4 percent in 2025.
The Riyad Capital analysis also added that the Kingdom’s non-oil sector is projected to grow at a rate of 4.8 percent in 2024, driven by growth-oriented fiscal policy.
The report further noted that non-oil activities in Saudi Arabia will accelerate further in 2025, with a projected expansion rate of 5.2 percent.
Last year, the International Monetary Fund noted that the likelihood of a rise in headline and core inflation in oil-exporting countries like Saudi Arabia is low.
“Headline and core inflation in many oil-exporting countries like Bahrain, Iraq, Kuwait, Oman, Qatar, and Saudi Arabia remain relatively lower than elsewhere,” said the IMF.
Wholesale price index increases
In another report, GASTAT revealed that Saudi Arabia’s Wholesale Price Index increased by 3.2 percent in May compared to the same month of the previous year.
This increase is mainly driven by a 14.5 percent rise in prices of basic chemicals and a 12 percent increase in the costs of refined petroleum products, the authority added.
Similarly, prices of food products, beverages, tobacco, and textiles rose by 1.8 percent year-on-year in May, due to a 7.4 percent increase in the prices of leather, leather products, and footwear.
On the other hand, the costs of ores and minerals decreased by 2.8 percent, mainly due to a 2.8 percent decrease in stone and sand prices.
Additionally, agricultural and fishery product expenses experienced a 1.3 percent year-on-year decrease in May, driven by a 2.8 percent decrease in fish and other fishing product prices and a 2.7 percent decline in live animals and animal product prices.
Furthermore, the prices of metal products, machinery, and equipment decreased by 0.4 percent in May compared to the same month of the previous year, attributed to a 6.6 percent decline in the prices of radio, television, and communication equipment and apparatus.
Compared to April, the Kingdom’s WPI decreased by 0.1 percent in May, driven by a 0.3 percent drop in the prices of food products, beverages, tobacco, and textiles.
This decline resulted from a 1.7 percent decrease in the prices of meat, fish, fruit, vegetables, oils, and fats, and a 0.4 percent decline in the prices of leather, leather products, and footwear.
Similarly, the costs of agriculture and fishery products also decreased by 0.2 percent month-on-month, driven by a 1.6 percent fall in the prices of live animals and animal products.
Compared to April, the prices of other transportable goods declined by 0.1 percent in May, driven by a 0.7 percent decrease in the costs of basic chemicals.
In contrast, the costs of metal products, machinery, and equipment rose by 0.1 percent, as a result of a 1.1 percent increase in the prices of electrical machinery and apparatus.
Average prices rising
Meanwhile, in another report, GASTAT revealed that the prices of Abu Sorra Egyptian oranges increased by 22.70 percent in May compared to the previous month.
Similarly, the prices of local tomatoes and Turkish plums rose by 12.80 percent and 10.33 percent, respectively, in May from April.
Additionally, Indian pomegranates and Pakistani mandarins also experienced notable increases, rising by 10.15 percent and 9.71 percent, respectively.
On the other hand, hotel accommodation prices in Saudi Arabia witnessed a 13.94 percent month-on-month decline.
Similarly, the costs of local melons, Lebanese peaches, and imported onions dipped by 13.30 percent, 11.37 percent, and 9.34 percent, respectively.
