Saudi inflation edged up 1.9% in September, no pass-through from the Houthis yet

Consumer prices held steady in Saudi’s first reading since the Houthis' escalations started. Annual inflation edged up to 1.9% in September, rising from 1.8% in each of the prior four months, according to Gastat data (pdf). The move is in line with Oxford Economics’ forecast that inflation would rise slightly, but remain contained below 2% for the coming months.

Housing is still the main driver, but it’s slowing. The housing, water, electricity, gas, and other fuels component rose 3.6% y-o-y, down from 3.9% in August and 4.2% in July, adding 0.7 percentage points to the headline figure. Actual rents rose 3.5%, down from 3.9% in August and about half of September 2025’s 6.7% pace. That tracks Oxford Economics’ forecast that Riyadh’s rent freeze will slow rental inflation over the coming quarters.

Personal items and leisure saw the steepest annual rises after housing. Personal care, social protection, and other goods and services rose 3.3% y-o-y, largely on a 12.9% jump in jewelry and watch prices. Recreation, sports, and culture rose 2.5%, driven by a 4.5% increase in holiday-package prices, while transport prices climbed 2.3%. Food and beverages held at 1.4%. Furnishings, household equipment, and periodic home maintenance (down 0.5%) and clothing and footwear (down 0.4%) were the only components with annual declines.

Consumer prices were broadly unchanged from August. Housing costs rose 0.1% m-o-m, including a 0.2% increase in actual rents, while food and beverages and personal care each rose 0.1%. Education services recorded the sharpest monthly increase, up 1.2%. Those gains were offset by declines in recreation, sports and culture (down 0.6%), restaurants and accommodation (down 0.5%), clothing and footwear (down 0.3%), furnishings and household equipment (down 0.2%), and transport (down 0.1%).

The rest of the macro picture

Wholesale price growth eased: The wholesale price index (pdf) increased 4.2% y-o-y in September, down from 5.0% in August. Gastat revised the index’s methodology this month, so earlier readings have changed. The figure was mainly driven by a 7.1% rise in other transportable goods, including a 26.1% jump in basic chemicals and a 2.6% increase in refined petroleum products and fuel. Agriculture and fishery product prices also rose 4.4%.

So did manufacturing costs: The producer price index (pdf) rose 5.1% y-o-y in August, down from 5.3% in July but was flat m-o-m. The month was driven by a 5.3% rise in manufacturing prices, including a 10.5% increase in chemicals and an 8.6% rise in basic metals. Water supply, sewerage, and waste management prices rose 4.2%, while electricity, gas, steam, and air-conditioning supply rose 2.2%.

OUR TAKE- Businesses have absorbed the cost spike so far. The jump in wholesale and producer prices hasn’t reached shoppers, with consumer inflation still below 2%, and both seem to be easing. Forecasters credit the SAR’s peg and government-set fuel and utility prices for limiting the impact on consumers. There are still risks. MT Trading’s Ahmed Chreim told us in July that higher shipping and ins. costs could push non-oil inflation up if the crisis drags on, while S&P Global Market Intelligence’s Ralf Wiegert told us last month he expects some of it to reach imported goods, though businesses will absorb part of the hit.