The annual inflation rate in Saudi Arabia remained at 1.5% in July, according to the General Authority for Statistics. This is the same level recorded in the previous month, which is considered the “lowest” since December 2023.
Record Rise in Rent
Residential rents were the “biggest contributor” to inflation last month, with the pace of rental increases accelerating to the highest level since data collection began in 2013.
Actual rental prices for homes increased by 11.1% YoY, driven by a 12% rise in apartment rents. In June, home prices recorded a 10.1% hike.
So what
July’s rent increases contributed to the overall rise in housing, water, electricity, gas, and other fuel prices by 9.3% compared to the previous year. Additionally, food and beverage prices jumped 0.4%.
It is pertinent to note that the Kingdom is witnessing a rising demand for housing as global companies establish regional offices locally, creating a demand for housing from their employees.
Some context
Inflation remains “relatively low” in Saudi Arabia compared to global levels, attributed to government policies that mitigate the effects of rising prices worldwide.
Now what
A Reuters survey of economists in July predicted that average inflation in the Kingdom would reach 2.1% next year.
