{"id":98115,"date":"2025-06-24T00:00:00","date_gmt":"2025-06-24T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/ksa\/2025\/06\/24\/housing-costs-push-inflation-rates-up-in-the-first-quarter\/"},"modified":"2025-06-24T00:00:00","modified_gmt":"2025-06-24T00:00:00","slug":"housing-costs-push-inflation-rates-up-in-the-first-quarter","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/ksa\/2025\/06\/24\/housing-costs-push-inflation-rates-up-in-the-first-quarter\/","title":{"rendered":"Housing costs push inflation rates up in the first quarter"},"content":{"rendered":"

<\/strong>The Kingdom\u2019s average Consumer<\/strong> Price Index (CPI) saw a 2.1% y-o-y increase in 1Q <\/strong>2025<\/strong>, according to the Saudi Central Bank\u2019s quarterly inflation report (pdf)<\/a>. This is the highest level recorded for a quarter since 3Q 2023, the report reads.<\/p>\n

(** Tap or click the headline above to read this story with all of the links<\/strong> to our background and outside sources.)<\/p>\n

Housing remains the main culprit:<\/strong> The rise was attributed to \u201cincreased domestic demand linked to rapid population growth in major cities,\u201d which drove up rental prices further. The housing, water, electricity, gas and other fuels segment registered the highest annual inflation rate, rising by 7.4% during the quarter. Housing costs were the single biggest contributor to inflation, accounting for about 59.2% of the CPI's movement in 1Q 2025.<\/p>\n

Miscellaneous goods and services came in second with 3.7%,<\/strong> followed by food and beverages (1.3%), restaurants and hotels (1.0%), and education (0.7%). <\/p>\n

Inflation rates varied across the Kingdom\u2019s cities<\/strong>. Riyadh (3.6%) and Makkah (3.3%) recorded the highest inflation rates, due to increased housing rentals, rise in food prices and higher consumer demand. The rise in Makkah was partly attributed to the Umrah season and the demolition of districts near the Sacred Mosque, which pushed up rental prices.<\/p>\n

ICYMI- <\/strong>The Kingdom launched a host of real estate reforms earlier this year<\/a>, including lifting land freezes in the north of the capital, amendments to the White Land Tax, and new rental regulations aimed at balancing the landlord-tenant relationship. The reforms aim to expand land availability, improve rental regulations, and rein in soaring property prices in Riyadh.<\/p>\n

MEANWHILE-<\/strong> Abha recorded a decline of 0.4%, attributed to stable rental prices, and<\/p>\n

lower transportation costs due to lower vehicle prices.<\/p>\n

Looking ahead:<\/strong> Inflation is expected to remain stable in 2Q 2025, due to slowing global inflation, the limited impact of suspended US tariffs, and rising housing rents and domestic demand linked to improved Saudi employment rates, Sama said.<\/p>\n

REMEMBER-<\/strong> Riyad Capital sees inflation rising to 2.5% this year, before easing slightly to 2.3% in 2026, up from an inflation reading of 1.7% in 2024. This is a less optimistic view on inflation than some others, with the IMF having recently cut its inflation forecasts to 2% for both 2025 and 2026, while Capital Economics expects<\/a> inflation to hover around 2-2.5% this year, before slowing to 2% in 2026.<\/p>\n

ALSO FROM THE REPORT- <\/strong>The Wholesale Price Index (WPI) increased 1.3% y-o-y in 1Q 2025, with agriculture and fishery products logging the highest y-o-y increase at 4.0%, followed by transportable goods (except metal products machinery and equipment) with a 2.7% increase, according to the report. <\/p>\n","protected":false},"excerpt":{"rendered":"

This is the highest inflation figure recorded for a quarter since 3Q 2023<\/p>\n","protected":false},"author":1,"featured_media":98116,"comment_status":"","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-98115","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":"8bf10d0c-d26b-406b-a808-943e93199206","order":"3","is_powered_by":false,"story_type":"1","photo_url":"https:\/\/ent.news\/2025\/5\/458.jpg","photo_position":"above","homepage_title":"","full_issue_title":"Inflation reaches 2.1% y-o-y in 1Q 2025 -Sama","related_issue":[98110],"teaser":"This is the highest inflation figure recorded for a quarter since 3Q 2023","voice_url":"https:\/\/s3.us-east-1.amazonaws.com\/ent.news\/audio\/2025\/6\/.a99562d9-96f5-4f2a-841d-48313e30f8bc.mp3"},"yoast_head":"\nHousing costs push inflation rates up in the first quarter - 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