Annual inflation recorded 2.2% y-o-y in September, down by 0.1 percentage points from August’s two-year high, according to the General Authority for Statistics’ (Gastat) latest consumer price index (pdf). The uptick was driven by a 5.2% increase in prices of housing, water, electricity, gas, and other fuels.

Rent would not let up yet: Housing, water, electricity, gas, and other fuels saw a 5.2% y-o-y increase during the month, triggered primarily by a 6.7% y-o-y increase in rents paid for housing.

Food and beverage prices also inched up 1.1% y-o-y, supported by a 0.6% rise in fresh or chilled meat prices. Restaurants and accommodation services prices climbed 1.5% y-o-y, mainly due to a 1.9% rise in accommodation service prices.

ALSO- Transport prices rose 1.6% y-o-y, driven by a 6.9% increase in passenger transport prices. Ins. and financial services prices climbed 7.7% y-o-y, stemming from a 12.7% surge in the prices of ins. services.

On the decline: Furnishings, household equipment, and routine household maintenance prices fell 0.6% y-o-y, largely due to a 3.2% drop in furniture, furnishings, and carpet prices. Meanwhile, information and communication prices decreased by 0.4%, weighed down by a 6.4% decline in information and communication equipment prices.

On a monthly basis, consumer prices fell 0.1% in September, primarily due to a 0.4% decrease in the transport division, according to Gastat’s full report (pdf) on September’s average prices of goods and services.

Also driving the decline: Restaurants and accommodation services prices fell 0.9% m-o-m, with the prices of furnished apartments down 9.2% and hotel accommodation dipping 5.8% during the month. Furnishings, household equipment, and routine household maintenance along with entertainment, sports and culture, clothing and shoes, and insurance and financial services divisions fell 0.3% m-o-m. Meanwhile, information and communication prices decreased by 0.1%.

ICYMI- Gastat updated the index’s methodology last month, setting 2023 as the new reference year and revising the basket’s items and weights based on the 2023 household income and expenditure survey. The update expanded the number of items from 490 to 582, widened coverage from 16 to 23 cities, and cut the weight of housing, water, electricity, gas, and other fuels from 25.5% to 19.5%, while raising the weight of food and beverages from 18.8% to 22%, making it the heaviest component in the index.

WHOLESALE PRICE INDEX-

Producer prices rose 2.1% y-o-y in September, unchanged from the past two previous months, according to Gastat’s wholesale price index (pdf). This was driven by a 4.0% increase in other transportable goods, except metal products, machinery, and equipment, as well as a 4.7% rise in agricultural and fishery products.

Wholesale prices inched up 0.3% m-o-m in September, supported by a 0.7% increase in prices of other transportable goods.

LOOKING AHEAD- The World Bank recently revised up its inflation forecast to 2.3% this year, in line with FinMin’s projections. The international lender expects inflation to take a modest downward trajectory to reach 2.2% in 2026, slightly above the ministry which sees inflation easing to 2% next year. “Looking ahead, we think that Saudi Arabia’s headline inflation rate will fall back over the remainder of this year to just below 2% y-o-y and disinflation will persist through 2026,” Capital Economics’ James Swanston wrote in a note seen by EnterpriseAM.

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