Saudi Arabia’s inflation rate fell to 2.3 percent in July compared to 2.7 percent in June, driven by relatively stable prices across all sectors, official data showed.
A report released by the General Authority for Statistics attributed the fall to the decrease in prices of furnishings, household equipment and maintenance, which went down by 0.3 percent in July.
Clothing and footwear prices slipped by 0.8 percent in July compared to June, while the cost of personal goods and services dipped by 0.6 percent during the same period.
In contrast, in July, housing, water, electricity, gas and other fuel prices increased by 0.3 percent compared to June.
The report further pointed out that food and beverage prices increased by 0.4 percent in July compared to June, while hotel prices rose by 0.3 percent.
Due to global economic headwinds, the inflation rates of all major economies have been witnessing a rise in recent months. However, Saudi Arabia has successfully bucked this trend by steadily maintaining its Consumer Price Index.
In June, the International Monetary Fund said that the Kingdom’s inflation rate is expected to remain at 2.8 percent in 2023, thanks to Saudi Arabia’s strong currency and ceiling on gasoline prices.
The Washington-based lender also noted that the Kingdom’s non-oil sector is predicted to remain strong and grow at an average of 5 percent this year.
Annual inflation rate rose in July
The rise in inflation on an annual basis in July was driven by an increase in housing prices which went up by 10.3 percent.
According to the GASTAT report, rents of apartments grew by 21.1 percent in July year-on-year.
“Prices for rents were the main driver of the inflation rate in July 2023 due to their high relative importance in the Saudi consumer basket with a weight of 21 percent,” said the statistics authority.
Additionally, food and beverage prices increased by 1.4 percent in July compared to the same month of the previous year, while transport expenses also rose by 0.9 percent in the same period.
WPI falls by 0.9% in July
Saudi Arabia’s Wholesale Price Index decreased by 0.9 percent in July compared to the year-ago period, driven by the decline in prices of basic chemicals, which fell by 21.5 percent.
According to the report, prices of agriculture and fisheries products dipped by 3.6 percent year-on-year in July, while metal products, machinery and equipment prices dropped by 1.6 percent during the same period.
“Other transportable goods decreased by 0.9 percent, due to the decrease in basic chemicals prices by 21.5 percent and wooden products prices by 8.5 percent,” added GASTAT in the report.
Compared to June 2023, the WPI stabilized in July because of the stability of the prices of metal products, machinery and equipment.