Saudi Arabia’s annual inflation rate reached 1.5 percent in June 2024 compared to the same month last year. According to the latest data from the General Authority for Statistics (GASTAT), the primary driver behind this increase was the rising cost of housing.
The report highlighted that the 8.4 percent surge in the prices of housing, water, electricity, gas, and other fuels significantly contributed to the overall inflation rate. Actual housing rents saw a 10.1 percent increase, with villa rentals rising by 7.9 percent. Given the substantial weight of the housing category in the consumer price index, this had a considerable impact on the inflation rate.
Increases in other sectors
The GASTAT report also noted that food and beverage prices increased by 1.1 percent, driven by a 6.5 percent rise in vegetable prices. The prices of restaurants and hotels rose by 2.4 percent, mainly due to a 9.8 percent increase in accommodation services. The education sector witnessed a 1.1 percent increase, primarily due to a 4.1 percent rise in fees for intermediate and secondary education.
Decreases in selected categories
On the other hand, the report showed declines in some categories. Furnishing and home equipment prices decreased by 3.7 percent, influenced by a 6.0 percent drop in furniture, carpets, and flooring prices. Clothing and footwear prices fell by 3.6 percent, with ready-made clothing prices declining by 6.3 percent. Transportation costs decreased by 2.7 percent, primarily due to a 4.6 percent reduction in vehicle purchase prices. Communication services saw a slight drop of 0.1 percent.
Monthly changes in the consumer price index
On a monthly basis, the consumer price index recorded a slight increase of 0.1 percent in June 2024 compared to the previous month. This was mainly driven by a 0.5 percent rise in housing, water, electricity, gas, and other fuels, due to a 0.7 percent increase in actual housing rents and prices. The report also noted minor increases in food and beverages with 0.1 percent, restaurants and hotels, and personal goods and services with 0.3 percent each, compared to the previous month.
Wholesale price index trends
In a separate report, GASTAT revealed that the wholesale price index (WPI) increased by 3.2 percent in June 2024 compared to the same month of the previous year. This was primarily driven by a 13.4 percent rise in prices of basic chemicals and an 11.9 percent increase in prices of refined petroleum products. The category of other transportable goods saw an 8.0 percent increase, significantly impacted by these price rises.
Prices of food products, beverages, tobacco, and textiles rose by 1.3 percent, with leather, leather products, and footwear prices increasing by 6.6 percent, and grain mills, starch, and other food products rising by 4.6 percent.
Read more: Saudi Arabia maintains steady inflation rate of 1.6 percent in April 2024
Monthly changes in the wholesale price index
However, on a monthly basis, the WPI decreased by 0.1 percent in June 2024 compared to May, attributed to a 0.3 percent decrease in the prices of ores and minerals, food products, beverages, tobacco, and textiles. The prices of basic metals also decreased by 0.6 percent, while prices of agriculture and fishery products increased by 0.4 percent, driven by a 1.8 percent rise in the prices of live animals and animal products.
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