Annual inflation cooled to 1.8% in January 2026 — its lowest level since February 2025, down from 2.1% in December, according to Gastat data (pdf). On a monthly basis, prices crept up just 0.2% compared to December.

Food and beverage prices — the heaviest component in the index — inched up slightly by 0.2% y-o-y, slower than December’s 1.3%, with the cereals category shrinking 0.4% from a 0.2% rise in December. The live animals and meat segment stood at 1.5%, while meat (fresh, chilled, or frozen) stood at 1.7%.

The rental squeeze isn’t going anywhere: Housing, water, and electricity costs rose 4.2% y-o-y, almost entirely propelled by a 5.2% jump in actual rentals for housing, as the impact of sweeping real estate reforms — including the rent freeze in Riyadh — still has not materialized in the data.

Luxury and personal care remain outliers: Prices for personal care and miscellaneous goods spiked 7.9%, driven by a 28.1% surge in jewelry and watches. This suggests that despite the moderate headline inflation, high-end discretionary spending among the Kingdom’s consumer base remains resilient.

Transport + travel still in the green: Transport costs rose 1.5% y-o-y, largely due to a 6.0% increase in passenger transport services. The recreation sector saw a 2.3% bump, with package holiday prices rising 3.7%.

ALSO- Wholesale pressure is building: The wholesale price index (WPI) hit 2.9% in January, driven by an 18.4% surge in basic chemicals and a 3.9% rise in refined petroleum products, according to Gastat’s latest WPI (pdf). A sharp 9.5% m-o-m jump in chemical prices suggests acute margin pressure for industrial operators and manufacturers heading further into this quarter.

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