{"id":99718,"date":"2025-08-17T00:00:00","date_gmt":"2025-08-17T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/ksa\/2025\/08\/17\/inflation-cools-to-its-lowest-in-five-months-in-july\/"},"modified":"2025-08-17T00:00:00","modified_gmt":"2025-08-17T00:00:00","slug":"inflation-cools-to-its-lowest-in-five-months-in-july","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/ksa\/2025\/08\/17\/inflation-cools-to-its-lowest-in-five-months-in-july\/","title":{"rendered":"Inflation cools to its lowest in five months in July"},"content":{"rendered":"

Annual inflation slowed to 2.1% y-o-y in July<\/strong>, down 0.2 percentage points from June<\/a>, marking its lowest reading in five months. The slowdown was primarily driven by a softer 5.6% growth in prices of housing, water, electricity, gas, and other fuels \u2014 the heaviest component in the consumer basket \u2014 according to the General Authority for Statistics\u2019 (Gastat) latest consumer price index (pdf)<\/a>. <\/p>\n

For more on the inflation trends in Saudi Arabia<\/strong>, read our previous coverage here<\/a>.<\/p>\n

July\u2019s inflation is the \u201cweakest pace since February,\u201d <\/strong>Capital Economics\u2019 James Swanston wrote in a recent research note seen by EnterpriseAM. July\u2019s reading was softer than Capital Economics\u2019 earlier forecast of 2.7% y-o-y and the consensus estimate of 2.3% y-o-y. \u201cOn a seasonally-adjusted annualized basis, prices declined by 0.9% \u2014 this was the first negative reading since March 2024 and the weakest pace in over two years,\u201d Swanston noted.<\/p>\n

On a monthly basis, consumer prices were essentially unchanged last month from June<\/strong>, with prices for transportation, restaurants, hotels, clothing and footwear, health, telecommunications, and tobacco showing \u201cno significant relative change.\u201d However, the cost of housing, water, electricity, gas, and fuel inched up 0.2% m-o-m, as did prices for entertainment and culture. In contrast, prices for food and beverages and home furnishings each fell 0.2%, while miscellaneous personal goods and services and education both inched down 0.1%.<\/p>\n

Housing, water, electricity, gas, and other fuels saw a 5.6% increase y-o-y during the <\/strong>m<\/strong>onth<\/strong>, easing from 6.5% y-o-y in June. A 6.6% y-o-y increase in rents paid for housing was the key driver of the increase, with a 6.4% rise in villa rentals being attributed as the main trigger.<\/p>\n

Food and beverage prices inched up 1.6% y-o-y<\/strong>, pushed by a 2.6% y-o-y price growth in meat and poultry. Personal goods and services rose 4.3% y-o-y, thanks to a 24.7% jump in the prices of jewelry, watches, and precious antiques.<\/p>\n

ALSO- <\/strong>Restaurant and hotel prices went up 1.4% y-o-y due to a 1.5% rise in restaurant and cafe prices, as well as garment costs. Finally, education prices were up 1.1% y-o-y, mainly led by a 3.8% rise in tertiary education fees.<\/p>\n

Declines in other sectors: <\/strong>Furnishing and home equipment prices fell 2.0% y-o-y, largely due to a 3.9% drop in prices of furniture, carpets, and flooring. Meanwhile, clothing and footwear prices inched down 0.4% y-o-y, affected by a 1.3% drop in garment prices. Transportation prices also fell 0.3% y-o-y, driven by a 1.6% decline in vehicle purchase prices.<\/p>\n

Looking ahead:<\/strong> Capital Economics expects inflation in the Kingdom to continue on a downward trajectory over the rest of the year, likely approaching 1% y-o-y by early 2026. \u201cEnergy inflation will remain contained with the fuel price cap staying in place and lower global food prices will push down food inflation,\u201d the agency noted, adding that it also foresees further easing of price pressures related to housing.<\/p>\n

Where this stands versus other projections:<\/strong> Riyad Capital sees<\/a> inflation rising to 2.5% this year, before easing slightly to 2.3% in 2026. The IMF said in June<\/a> that inflation in Saudi Arabia will remain around 2% this year, supported by the currency\u2019s peg to the USD, domestic subsidies, and a flexible labor supply.<\/p>\n

\n

WHOLESALE PRICE INDEX-<\/p>\n

Producer prices rose 2.1% y-o-y in July<\/strong>, unchanged from the previous month. This was driven by a 4.1% increase in other transportable goods, except metal products, machinery, and equipment, as well as a 4.4% rise in the prices of agricultural and fishery products, according to Gastat\u2019s wholesale price index (pdf)<\/a>.<\/p>\n

Wholesale prices inched down 0.1% m-o-m during the month<\/strong>, also attributed to a 0.4% m-o-m drop in the prices of other transportable goods, except metal products, machinery, and equipment. The decline was largely influenced by a 3.0% decrease in the prices of basic chemicals and a 0.1% drop in the prices of rubber and plastic products.<\/p>\n","protected":false},"excerpt":{"rendered":"

The slowdown was driven by lower price acceleration in housing, water, electricity, gas, and other fuels<\/p>\n","protected":false},"author":1,"featured_media":99719,"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":[1098,27,10,21],"brand":[],"newspack_spnsrs_tax":[],"class_list":["post-99718","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-economy","tag-consumer-price-index-cpi","tag-economy","tag-enterpriseam-ksa","tag-inflation","wpautop","entry"],"acf":{"mongo_id":"85edae8d-d655-4350-8512-a5d542067f5b","order":"3","is_powered_by":false,"story_type":"1","photo_url":"https:\/\/ent.news\/2025\/6\/788.jpg","photo_position":"above","homepage_title":"","full_issue_title":"Inflation cools to its lowest in five months in July","related_issue":[99713],"teaser":"The slowdown was driven by lower price acceleration in housing, water, electricity, gas, and other fuels","voice_url":"https:\/\/s3.us-east-1.amazonaws.com\/ent.news\/audio\/2025\/8\/.4accdde2-da8c-4180-b36f-d557471f733c.mp3"},"yoast_head":"\nInflation cools to its lowest in five months in July - 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