Saudi Arabia’s inflation remained subdued in July at 1.8% year on year, reflecting continued overall price stability despite housing and rents remaining the main source of inflationary pressure.
Data released Thursday by the General Authority for Statistics (GASTAT) showed prices for housing, water, electricity, gas and other fuels rose 4.2%, driven by a 4.3% increase in actual housing rents. Food and beverages increased 1.5%, while transport rose 1.4%.
The figures show that inflation remains concentrated in a limited number of categories rather than reflecting broad-based price increases. Saudi Arabia is among the G20 economies with relatively low inflation.
King Abdulaziz University economics professor Salem Baajajah told Asharq Al-Awsat that the 1.8% rate was “a positive reading for the economy, particularly given continuing global inflationary pressures.”
Increases are concentrated largely in housing and rents rather than spreading across the consumer basket, he said.
Economist Ahmed Al-Shahri cautioned that the figure should not be viewed as evidence that price pressures had disappeared, particularly with continued housing demand in major cities.
“The challenge in the coming period will not only be controlling overall inflation, but ensuring that pressures in the housing sector do not develop into a broader wave extending to other spending categories,” he stated.
Housing was the largest driver of inflation in July. Personal care, social protection and miscellaneous goods and services rose 2.9%, driven by an 11.1% increase in other personal effects, while jewelry and watch prices rose 12%. Recreation, sport and culture increased 2.4%.
By contrast, furnishings, household equipment and routine household maintenance declined 0.5%, while clothing and footwear fell 0.4%, helping contain overall inflationary pressures.
Food and beverages contributed 0.3 percentage point to overall inflation, while transport and personal care, social protection and miscellaneous goods and services each contributed 0.2 percentage point.
On a monthly basis, consumer prices rose 0.2% in July from June. Housing, water, electricity, gas and other fuels increased 0.9%, driven by a 7.1% rise in electricity, gas and other fuels. Restaurants and accommodation services rose 0.5%, recreation, sport and culture 0.4%, and transport 0.2%.
