Inflation accelerated to 2.3% y-o-y in March, up from 2.0% in February, marking the first rise in the Kingdom’s consumer prices since January and the fastest since the middle of 2023, according to the General Authority for Statistics’ (Gastat) latest consumer price index (pdf). The Kingdom maintained an upward trajectory in its inflation figures from August through January, with December being the only month to log a decline during the five-month period.

On a monthly basis, consumer prices rose at a slightly higher pace of 0.3%, on the back of a 0.5% price uptick in the housing, water, electricity, gas, and other fuels category, as well as a 0.3% rise in food and beverage prices.

Rent inflation at the lowest level in a year (but still high): Housing, water, electricity, gas, and other fuels — the heaviest component in the consumer basket — saw a 6.9% increase on an annual basis, mostly driven by an 8.2% increase in rents paid for housing during March. The rate of increase in housing rentals has been on a downward trajectory since this year started.

Food and beverage prices were up 2.0% during the month, driven by a 3.8% increase in meat and poultry prices. Personal goods and services prices also increased by 3.9%, driven by a whopping 26.2% rise in the prices of jewelry, watches, and precious antiques. Meanwhile, restaurants and hotel prices rose 1.3%, driven by a 3.3% rise in the cost of hotel and furnished apartment services.

Education prices also continued to increase in March, rising 1.1% y-o-y on the back of a 4.3% y-o-y increase in tuition fees for tertiary education.

Many of the same items continued to cool off: Furnishing and home equipment prices continued to fall in March, this time seeing a 2.6% y-o-y decrease on the back of a 4.1% decline in furniture, carpets, and flooring prices. Clothing and footwear prices also fell by 0.8%, affected by a 1.9% slip in ready-made clothing prices. Meanwhile, transportation costs went down by 0.8%, which was attributed to a 1.5% decrease in vehicle purchase prices.

This came slightly below analysts’ expectations: Capital Economics expected the annual inflation reading in March to come in at 2.4%, with the research unit seeing the Kingdom’s headline inflation rate hovering around the 2.0-2.5% y-o-y range over the next two quarters before slowing back down towards the 1.0% mark as we head into 2026. The IMF sees inflation holding steady at 1.9% and 2.0% this year and the next, while Al Rajhi Capital sees inflation remaining stable at 2.1% in 2025 before cooling slightly to 2.0% in 2026.

WHOLESALE PRICE INDEX-

Producer prices were up by 1.5% y-o-y in March 2025 on the back of a 3.2% increase in the prices of other transportable goods, except metal products, machinery, and equipment, coupled with a 3.6% increase in the prices of agriculture and fishery products, according to Gastat’s wholesale price index (pdf). On a monthly basis, wholesale prices increased by 0.4% m-o-m in March due to a 0.4% decline in the prices of metal products, machinery, and equipment — itself driven by a 2.9% increase in the prices of fabricated metal products.

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