Inflation once again came in at 2.3% in April, remaining unchanged from March, according to the General Authority for Statistics’ (Gastat) latest consumer price index (pdf). This keeps the Kingdom’s inflation reading at its fastest pace in nearly two years, with Saudi Arabia having maintained an upward trajectory in its inflation figures from August through January. December was the only month to log a decline during the five-month period.

On a monthly basis, consumer prices rose 0.3%, remaining unchanged from the previous month on the back of a 0.3% price uptick in the housing, water, electricity, gas, and other fuels category, a 0.4% rise in food and beverage prices, and a 0.4% increase in actual housing rent prices.

Rental prices were once again the main driver: Housing, water, electricity, gas, and other fuels — the heaviest component in the consumer basket — saw a 6.8% increase y-o-y. This was mostly driven by an 8.1% increase in rents paid for housing in April — itself caused by an 11.9% increase in apartment rental prices. This represents the lowest rise in rent inflation in over a year, with the rate of increase in housing rentals continuing its downward trajectory since the start of this year.

“Housing and utilities inflation eased to its softest pace since 2022. [...] This is a potential sign that the Kingdom’s latest housing reforms to cap rents and increase housing supply are dampening housing cost pressures,” Capital Economics wrote in a note seen by EnterpriseAM.

Food and beverage prices were up 2.2% during the month, driven by a 9.4% rise in vegetable prices. Personal goods and services prices also rose by 3.5%, driven by a 21.9% increase in the prices of jewelry, watches, and precious antiques. Meanwhile, restaurant and hotel prices rose by 2%, which was attributed to a 2% rise in catering service prices.

Education prices also rose in April, rose 1.3% y-o-y, primarily driven by a 5.6% y-o-y rise in non-university post-secondary education.

Categories that were already on the decline continued to record drops in prices on an annual basis: Furnishing and home equipment prices fell by 1.8% y-o-y, driven by a 3.5% decrease in furniture, carpets, and flooring prices. Clothing and footwear prices also slipped by 1.2%, affected by a 2.1% decline in ready-made clothing prices. Meanwhile, transportation costs dropped 1.0%, attributed to a 1.8% decrease in vehicle purchase prices.

What the analysts are expecting: The International Monetary Fund (IMF) has recently cut its inflation forecasts to 2% both in 2025 and 2026 — but still up from 1.7% in 2024. The prediction for this year marks a slight upward revision of 0.1 percentage point from the fund’s previous forecast in December.

Meanwhile, Capital Economics sees inflation hovering around 2-2.5% y-o-y for much of this year, before falling back below 2% y-o-y as we head into 2026, which it said will be down to “weaker transport and housing and utilities inflation.”

WHOLESALE PRICE INDEX-

Producer prices rose by 2% y-o-y in April, driven by a 4.5% increase in the prices of agriculture and fishery products, as well as a 4.1% increase in the prices of other transportable goods (excluding metal products, machinery, and equipment), according to Gastat’s wholesale price index (pdf). On a monthly basis, wholesale prices rose by just 0.1% m-o-m, partly due to a 0.7% rise in the prices of agriculture and fishery products. The prices of metal products, machinery, and equipment also increased by 0.2% during the month.

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