Saudi Arabia’s annual inflation eased noticeably in January, rising 1.8 percent year on year, the slowest pace since February last year, signaling positive momentum for the domestic economy.
According to official data, inflation in January 2026 was driven mainly by higher housing, water, electricity, gas and other fuel prices, which rose 4.2 percent. Transport costs increased 1.5 percent, while restaurant and accommodation services rose 1 percent.
Housing rents remain the largest contributor to inflation, with actual rents climbing 5.2 percent annually.
Economists said January’s slowdown points to greater price stability and easing living costs, reflecting government measures to support growth.
Osama bin Ghanem Al-Obaidi, an advisor and professor of international commercial law, said the 1.8 percent annual rate is the lowest among G20 countries. While housing and utilities remain the largest contributors, he noted that rent increases are now less intense than in recent months.
Al-Obaidi added that inflation control in Saudi Arabia remains effective, with relative price stability supporting consumer purchasing power and easing pressure on low-income households. He said January’s data reflects growing market stability, with pressures in some categories contained by demand.
Economist Ahmed Al-Shahri, for his part, noted that the moderation in inflation boosts confidence and encourages investment and broader economic activity. He attributed the improvement to government efforts to ensure economic stability and advance sustainable development, underscoring the effectiveness of fiscal and economic policies.
Al-Shahri highlighted housing and rental measures introduced under the direction of Crown Prince and Prime Minister Mohammed bin Salman, noting their significant impact. Despite the 1.8 percent annual rise, he said inflation remains low by historical standards, indicating that price pressures are gradually easing after post-pandemic global shocks and supply-chain disruptions.
Category Breakdown
Transport prices rose 1.5 percent year on year, driven by a 6 percent increase in passenger transport services. Restaurant and accommodation prices increased 1 percent, reflecting higher food and beverage services. Personal care and other goods and services surged 7.9 percent, led by higher jewelry and watch prices. Insurance and financial services rose 3.3 percent, while food and beverages edged up 0.2 percent.
Furniture and household equipment prices fell 0.3 percent, and health prices dipped 0.1 percent.
On a monthly basis, the consumer price index rose 0.2 percent in January compared with December 2025, supported by higher housing, transport and restaurant prices, while food and beverages declined 0.6 percent.
