Saudi inflation continues to ease in December to 1.5%

Image credit: HASSAN AMMAR/ Getty Images

Saudi Arabia’s annual inflation rate eased to 1.5 per cent in December, from 1.7 per cent the previous month, government data showed on Monday, with housing once again the main driver.

Rental prices increased by 9 per cent in December 2023, reflecting the increase in rents for apartments of 12.1 per cent.

“Prices for rents were the main driver of the inflation rate in December 2023 due to their high relative importance in the Saudi consumer basket (with a weight of 21 per cent),” the Saudi General Authority for Statistics said in a statement.

The statistics authority said the prices for food and beverages rose 1.2 per cent due to a 4.1 per cent increase in the price of milk products and eggs while restaurant and hotel prices rose by 2.5 per cent driven by an increase in catering services prices.

#GASTAT publishes the Consumer Price Index, December 2023.

— الهيئة العامة للإحصاء (@Stats_Saudi) January 15, 2024

Furthermore, the price for recreation and culture prices jumped by 1 per cent on the back of a 7.1 per cent surge in package holidays prices while education prices rose by 0.8 per cent, due to the increase in secondary education.

Inflation has been slowly easing in Saudi Arabia and has remained relatively contained compared to global inflation levels, in part due to government policies to manage price hikes.

Fitch Solution said inflation is expected to decline year-on-year, reaching an average of 1.6 per cent in 2024, although this is still elevated compared to figures that consumers are used to pre-COVID levels.

Read: Saudi Arabia approves 2024 state budget, forecasts SAR79bn deficit