{"id":104150,"date":"2026-01-18T00:00:00","date_gmt":"2026-01-18T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/ksa\/?p=104150"},"modified":"2026-01-18T04:37:35","modified_gmt":"2026-01-18T04:37:35","slug":"inflation-stabilizes-at-2-1-as-housing-chemicals-drive-year-end-heat","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/ksa\/2026\/01\/18\/inflation-stabilizes-at-2-1-as-housing-chemicals-drive-year-end-heat\/","title":{"rendered":"Inflation stabilizes at 2.1% as housing, chemicals drive year-end heat"},"content":{"rendered":"

Saudi Arabia\u2019s annual inflation rate rose to 2.1% in December 2025<\/strong>, up from 1.9% in November, according to the latest General Authority for Statistics (Gastat) figures (pdf)<\/a>. While the headline figure remains low compared to global peers, it confirms that Saudi inflation is rooted in its internal housing and infrastructure story. The uptick signals a stabilization of price growth near the 2% mark as the Kingdom enters 2026, with the annual headline rate having fluctuated between 1.9-2.3% throughout the past year.<\/p>\n

What changed?<\/strong> The 2.1% rate marks a year of stability, with the headline rate fluctuating in a narrow 1.9-2.3% band throughout 2025. However, the composition of that inflation is shifting.<\/p>\n

Rentals are the engine:<\/strong> Housing and utility costs rose 4.1% y-o-y, fueled almost entirely by a 5.3% jump in residential rents. The data confirms that urban expansion is outpacing supply, with persistent 5%+ growth in rents creating a higher floor for the cost of living \u2014 and, by extension, wage expectations \u2014 in major cities including Riyadh. <\/p>\n

High-end consumer spending is looking healthy:<\/strong> Personal care and social protection prices rose 7.0%, largely due to a massive 25.8% spike in jewelry and watch prices. <\/p>\n

Wholesale pressure:<\/strong> The Wholesale Price Index (WPI) hit 3.1% in December, driven by an 8.2% jump in refined petroleum products and a 7.8% rise in basic chemicals, according to Gastat\u2019s wholesale price index (pdf)<\/a>. Rising chemical wholesale prices \u2014 which were up 13.8% m-o-m \u2014 suggest potential margin pressure for manufacturers heading into 1Q 2026.<\/p>\n

\n

What comes next<\/p>\n

The peak of the \u201chousing heat\u201d effect may be in the rearview mirror:<\/strong> Capital Economics predicts the headline rate will cool toward 1.0% by 3Q 2026 as the rental market finally begins to absorb new supply. If rental pressures dissipate as expected, the headline rate should dip back below the 2.0% mark through the second half of the year.<\/p>\n","protected":false},"excerpt":{"rendered":"

Persistent growth in rent prices is creating a higher floor for the cost of living<\/p>\n","protected":false},"author":1,"featured_media":104151,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"newspack_ads_suppress_ads":false,"newspack_popups_has_disabled_popups":false,"newspack_sponsor_sponsorship_scope":"","newspack_sponsor_native_byline_display":"inherit","newspack_sponsor_native_category_display":"inherit","newspack_sponsor_underwriter_style":"inherit","newspack_sponsor_underwriter_placement":"inherit","ep_exclude_from_search":false,"_primary_brand":0,"newspack_featured_image_position":"","newspack_post_subtitle":"","newspack_article_summary_title":"Overview:","newspack_article_summary":"","newspack_hide_updated_date":false,"newspack_show_updated_date":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[2571],"tags":[27,10,21],"brand":[],"newspack_spnsrs_tax":[],"class_list":["post-104150","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-economy","tag-economy","tag-enterpriseam-ksa","tag-inflation","wpautop","entry"],"acf":{"mongo_id":"8c1dbb19-305d-4462-8a90-99b9564d148f","order":"3","is_powered_by":false,"story_type":"1","photo_url":"https:\/\/ent.news\/2024\/8\/1488.jpg","photo_position":"above","homepage_title":"","full_issue_title":"Saudi\u2019s inflation edges up to 2.1% in December as housing rents keep upward pressure","related_issue":[104145],"teaser":"Persistent growth in rent prices is creating a higher floor for the cost of living"},"yoast_head":"\nInflation stabilizes at 2.1% as housing, chemicals drive year-end heat - 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