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Inflation decelerated slightly to 1.5% y-o-y in June, marking the first month of decline following a three-month plateau, according to the General Authority for Statistics’ (Gastat) latest consumer price index (pdf). The figure had been holding steady at 1.6% from March through to May. Overall, consumer prices increased at a slower clip in June compared to the previous month, inching up 0.1% primarily driven by an 0.7% increase in housing rents.
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The culprit? It’s always rent: Actual housing rents — which weighs the heaviest of all components in the Saudi consumer basket — experienced the most significant y-o-y rise, growing 10.1% in June compared to the same month in 2023 on the back of a 7.9% increase in villa rents, according to the statistics agency.
REMEMBER- Retailers and mall operators are also facing higher rents, with average rental rates in Riyadh’s retail market increasing by 3% y-o-y to SAR 2.7k per sqm for regional and international malls, according to a recent Saudi market overview by Knight Frank. ِEven so, occupancy rates have risen to 90% y-o-y, supported by a 56% y-o-y tourism boom in 2023.
Food and beverage and the education sectors each saw prices rise 1.1% y-o-y in June, mainly driven by a 6.5% y-o-y rise in vegetable prices and a 4.1%y-o-y rise in secondary school fees. The cost of dining out or staying at a hotel grew 2.4% y-o-y on the back of a 9.8% increase in accommodation service prices.
Want to dig deeper? Dive into the government’s breakdown of the average prices of goodsand services for June here (pdf).
Meanwhile, carpets, clothes, and cars are getting cheaper: Furniture and home item prices fell 3.7% y-o-y, on the back of a 6.0% drop in the price of carpets and flooring. Additionally, a 6.3% price drop in ready-made clothing drove down the price of clothing and footwear 3.6% y-o-y, marking a fourth-month downward trend. Transportation was down 2.7% y-o-y, driven by a 4.6% drop in the price of cars.
Producer prices remained unchanged from May, holding steady at 3.2% y-o-y in June, according to Gastat’s wholesale price index (pdf). The uptick was driven by basic chemicals (up 13.4% y-o-y) and refined petroleum products (up 12% y-o-y), as well as food products, beverages, tobacco, and textiles, which rose 1.3% y-o-y.
