Saudi inflation ticks up modestly in March as conflict spillover remains muted

The regional conflict had little to no effect on Saudi Arabia’s annual inflation rate, which inched up marginally to 1.8% in March, compared to 1.7% in February, according to the latest data (pdf) from the General Authority for Statistics (GASTAT). Despite concerns around the US-Iran conflict, there is currently “no evidence of a rise in price pressures” feeding through to Saudi consumers, according to an Emirates NBD note seen by EnterpriseAM.

Chalk it up to shock absorption: “We’ve been seeing CPI on a sloliw crawl upward from early in the year, but still below 2% inflation,” MENA economist Hamzeh Al Gaaod tells EnterpriseAM. He attributed this stability to the Kingdom's ability to absorb shocks, with increased shipping through air and land — particularly via Jordan — and steady activity at Jeddah and Yanbu ports providing the necessary relief to prevent a spike in consumer staple prices. This resilience shows through even as the closure of the Strait of Hormuz impacted trade flows, Al Gaaod added.

Housing still leads, with a slight Ramadan effect in tow: The headline figure continues to be driven primarily by the housing, water, electricity, gas, and other fuels segment, which rose 3.9% y-o-y, pushed by a 4.8% increase in actual rents. Transport and hospitality also chipped in, with transport prices up 0.9% and restaurant and accommodation services rising 2.2%. Meanwhile, personal care and miscellaneous goods jumped 8.2% on higher jewelry and watch prices. Food and beverage prices ticked up 0.3% y-o-y (after remaining flat in February) on seasonal Ramadan demand, while clothing and furnishings edged down 0.1%.

Modest monthly increases: On a monthly basis, inflation rose 0.3%, driven by a 0.5% increase in food and beverage prices and a 0.9% rise in ins. and financial services. Conversely, transport prices dipped 0.2% during the month.

Unbothered by the effects of the war, inflation in Saudi Arabia is expected to cool in 2026 to an average of 1.6%, compared to 2.0% last year, Emirates NBD said. “While the regional conflict offers some upside risk to this projection, the March data suggest that the reasoning stands for the time being. While there are undoubtedly some global price rises stemming from the conflict, the stronger USD will go some way to mitigating this for Saudi Arabia’s imports, while we still expect that housing inflation will continue to soften,” according to the note.

Wholesale pressure eased slightly, with the wholesale price index rising 3.3% y-o-y in March, easing from 3.5% in February. The movement was driven largely by a 6.4% increase in other transportable goods, including a 33.6% spike in basic chemicals and a 3.9% rise in refined petroleum products, according to separate Gastat data (pdf). On a monthly basis, wholesale prices edged up 0.2%, supported by gains in metal products, machinery, and transportable goods.