Inflation remained unchanged at 1.6% y-o-y in May, marking the third month in a row at that rate, according to the latest consumer price index (pdf) from the General Authority for Statistics (Gastat). On a monthly basis, consumer prices rose 0.2% m-o-m last month, driven by a 0.4% increase in housing, water, electricity, gas, and other fuel prices.

Unsurprisingly, rent is again the biggest driver of inflation, with rental prices climbing 10.5% y-o-y and 0.5% m-o-m in May. The increase was driven primarily by apartment rents, which climbed 14.3% annually. The month prior, villa rental prices were the main reason for overall rent increases.

REMEMBER- There remains a chance that officials could move to impose a modest form of rent control with a view to blunting the pace at which rents are increasing. In May, the Shura Council called on the Real Estate General Authority to create a national plan to tackle rising rent prices in the Kingdom, according to state news agency SPA. The council wants to see the authority setting price caps on real estate. Officials have yet to put meat on that statement.

Also getting more expensive: Food and beverage prices, which were up 1.4% y-o-y; restaurants and hotels (up 2.5% y-o-y due to a 1.9% increase in food service prices); and education, with a 1.1% y-o-y increase.

On the flipside, clothing, footwear, home furnishings, and cars all got cheaper: A 6.9% y-o-y drop in the price of ready-made clothing drove a 4.0% y-o-y decrease in the overall clothing and footwear sector last month, marking the fourth consecutive month that clothing and footwear prices have fallen. Car prices also declined 4.1% y-o-y, pushing overall transport prices to fall 2.4% y-o-y. Meanwhile, furnishing and home equipment prices dipped 3.8% on the back of a 5.8% y-o-y decrease in the prices of furniture, carpets, and flooring.

Meanwhile, producer prices rose 3.2% y-o-y in May, breaking an upward trend from the month prior, according to Gastat’s wholesale price index(pdf). The uptick was driven by basic chemicals (up 14.5% y-o-y) and refined petroleum products (up 12% y-o-y), as well as food products, beverages, tobacco, and textiles, which rose 1.8%.

Tags: