Saudi inflation ticks higher in May to 2.8 per cent, driven by rents

Saudi Arabia’s inflation rate was 2.8 per cent in May, slightly higher than 2.7 per cent the previous month, driven by housing costs, government data released on Thursday showed.

Higher prices of housing, water, electricity, gas, and other fuels rose by 8.4 per cent in May, year-on-year, while the food and beverage sector – the leading driver for inflation during much of 2022 – rose by 0.9 per cent, the General Authority for Statistics data showed.

“Prices for rents were the main driver of the inflation rate in May 2023 due to their high relative importance in the Saudi consumer basket (with a weight of 21.0 per cent),” a statement said.

Actual rents for housing rose by 9.9 per cent in May, with rents for apartments rising by 23.7 per cent. Prices for restaurants and hotels increased by 5 per cent and for recreation and culture by 3.8 per cent.

Consumer prices increased by 0.2 per cent month on month.

Inflation in Saudi Arabia has been on a downward trend this year, from 3.4 per cent in January.