RIYADH: Saudi Arabia’s inflation held firm at 2 percent year on year in February, driven largely by rising housing costs, official data showed.
According to the General Authority for Statistics, the increase was fueled by an 8.5 percent surge in housing rents, contributing to a 7.1 percent overall rise in the housing, water, electricity, gas, and fuels category.
The inflation rate remains consistent with Saudi Arabia’s efforts to balance economic growth with price stability as the Kingdom advances its Vision 2030 strategy, which aims to diversify the economy beyond oil.
The government’s November 2024 budget forecast anticipated inflation to hold steady at 1.9 percent in 2025, up slightly from 1.7 percent in 2024. Meanwhile, the World Bank projected a stable 2.3 percent rate this year, below the Gulf Cooperation Council average.
“On a monthly basis, the consumer price index in February 2025 recorded relative stability compared to January 2025, rising by 0.2 percent due to the increase of housing, water, electricity, gas, and other fuels section by 0.4 percent, driven by a 0.4 percent increase in actual housing rent prices,” said GASTAT.
Sector breakdown
Food and beverage prices saw a modest rise of 1 percent, largely influenced by a 3.7 percent increase in meat and poultry costs. Personal goods and services climbed 3.9 percent, bolstered by a 26.7 percent jump in jewelry prices.
Restaurant and hotel costs edged up 0.8 percent year on year, while furniture and home equipment prices dropped 2.5 percent. Clothing and footwear prices declined 1 percent, led by a 2.4 percent drop in ready-made clothing.
Transportation costs also dipped 1.5 percent compared to February 2024.
On a monthly basis, consumer prices remained stable overall, with food and beverages slipping 0.2 percent. Personal goods and services rose 0.7 percent, while health and tobacco prices held steady.
Wholesale Price Index
In a separate report, GASTAT noted that Saudi Arabia’s Wholesale Price Index increased 1.5 percent year on year in February, driven by a 3.4 percent rise in other transportable goods prices and a 3.9 percent increase in agriculture and fishery products.
Food products, beverages, tobacco, and textiles fell by 0.1 percent year on year, while metal products, machinery, and equipment prices dipped 0.5 percent. Ores and minerals costs dropped 1.9 percent.
Compared to January, the WPI declined 0.5 percent, led by a 1.4 percent fall in other transportable goods prices, excluding metal products, machinery, and equipment. Food products, beverages, tobacco, and textiles also saw a marginal 0.1 percent drop, while agriculture and fishery product costs rose 1.6 percent.
