Saudi Arabia’s annual inflation increased to 2% in January, mainly due to a rise in housing and rental prices
Saudi Arabia’s annual inflation rate rose to 2% in January, mainly due to an 8% increase in housing, utilities, and fuel costs, according to the General Authority for Statistics (GASTAT).
Saudi Arabia’s inflation rose to 2% in January, mainly due to higher housing and rental costs, according to GASTAT.
Inflation Trends
- Housing, utilities, and fuel costs increased by 8%, driven by a 9.7% rise in housing rents, especially a 7.7% jump in villa rentals. This had a major impact on inflation since housing makes up 25.5% of the index.
- Food and beverage prices rose by 0.8%, mainly due to a 5.6% increase in vegetable prices.
- Personal goods and services rose by 3.3%, influenced by a 21.6% surge in jewelry, watches, and antiques.
- Restaurants and hotels saw a 0.8% increase, while education costs went up by 0.6%.
Price Drops:
- Furnishings and home equipment prices fell by 2.4%.
- Clothing and footwear prices dropped by 1.5%.
- Transportation and communication costs declined by 1.9%.
On a monthly basis, the consumer price index (CPI) increased by 0.3% from December.
Economic Growth
Saudi Arabia’s economy reached $1.1 trillion (SAR 4 trillion) by the end of 2024, according to Minister of Investment Khalid Al-Falih. The non-oil sector now makes up 52% of the economy, aligning with Vision 2030’s diversification goals.
- The economy grew 1.3% in 2024, mainly due to a 4.3% rise in non-oil activities and a 2.6% increase in government activities.
- However, the oil sector shrank by 4.5%.
- In Q4 2024, GDP grew by 4.4%, the highest quarterly growth in two years.
- Non-oil activities rose 4.6%, while the oil sector grew 3.4%.
Non-Oil Sector Growth
Saudi Arabia’s non-oil sector saw its fastest growth in over a decade in January, driven by strong new orders and business activity. The Riyad Bank PMI jumped to 60.5 in January from 58.4 in December.
Published: 17th February 2025
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