Inflation decelerated in November to 1.9% y-o-y, a 0.3 percentage points down compared to 2.2% in October, according to the General Authority for Statistics’ (Gastat) consumer price index (pdf).

Housing is cooling down even more, as the effect of Riyadh’s rental freeze policy starts to show up in the index. The 4.3% y-o-y increase in housing, water, electricity, gas, and other fuels — mainly driven by a 5.4% y-o-y increase in housing rents — is the lowest reading since October 2022, and a far cry from the 7.8% peak in October of last year.

  • Emirates NBD anticipates a further slowdown in the coming year, the bank said in a note (pdf).

Food and beverage prices — the heaviest component in the index — inched up by 1.3% y-o-y, slower than October. Meanwhile, entertainment, sports and culture also inched up 1.3%, on the back of a 2.1% increase in prices of holiday deals.

ALSO- Transport prices rose 1.5% y-o-y, driven by a 6.4% increase in passenger transport prices.

On the decline: Restaurants and accommodation services prices also fell 0.5% y-o-y due to a 2.3% y-o-y slowdown in accommodation services. Furnishings, household equipment, and routine household maintenance prices declined 0.3% y-o-y, largely due to a 3.3% drop in furniture, furnishings, and carpet prices.

Seasonality could be behind slowdowns and declines in prices, as demand could be cooling for holiday and travel spending, reflected in food and transport categories, TS Lombard’s MENA Economist Hamzeh Al Gaaod told EnterpriseAM.

A downward trend for 2026? Inflation could decline to levels below 1% y-o-y for the coming year “as housing-related price pressures continue to fade and lower global energy prices dampen fuel inflation,” according to a Capital Economics note seen by EnterpriseAM. Deflationary rates could be in the cards by the end of next year, CE adds.

MEANWHILE- The Finance Ministry has inflation projected at 2% in 2026, while forecasts from the World Bank see inflation averaging 2.2%.

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