In August 2024, Saudi Arabia’s annual inflation rate increased to 1.6%, up from 1.5% in July, according to a report by the General Authority for Statistics. The rise is mainly attributed to higher prices in the housing, water, electricity, and fuel sectors, which saw an 8.9% increase, as well as a 0.9% rise in food and beverage prices.
The report highlighted that actual housing rents experienced a notable surge of 10.7%, which contributed significantly to the overall inflation rate. This marks a continued trend in price increases, as inflation held steady at 1.5% during both June and July.
Within the food and beverage sector, vegetable prices rose sharply by 4.6%, playing a key role in driving up costs in that category. Other areas also saw price increases. Restaurant and hotel services registered a 1.5% hike, while education costs grew by 1.6%. These increases reflect the broader impact of rising costs across essential services and everyday expenses in Saudi Arabia.
However, some sectors saw a decline in prices. For instance, transportation costs dropped by 3.4%, offering some relief to consumers. Additionally, the furnishings and household equipment sector experienced a 3.5% decrease in prices, indicating a mixed trend across various sectors.
On a month-to-month basis, the inflation rate in August showed a modest increase of 0.1%.
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Despite these rises, Saudi Arabia’s inflation remains relatively low when compared to global averages. The International Monetary Fund (IMF), in its latest report, predicted that Saudi Arabia’s inflation rate will average 1.9% in 2024 and slightly increase to 2% by 2025. This forecast suggests that while inflation is rising, it is still manageable and under control compared to other countries facing more severe economic challenges.
