Saudi Arabia’s annual inflation rate inched up to 1.6 per cent in August, from 1.5 per cent in July, government data showed, driven by an increase in housing rents and food prices.

Housing rents rose by 10.7 per cent in August, weighing on the overall rise in prices of housing, water, electricity, gas, and other fuels by 8.9 per cent, according to the General Authority for Statistics.

The inflation rate had held steady at 1.5 per cent in June and July, underpinned mostly by apartment rents.

In August data showed that food and beverage prices rose 0.9 per cent, a bigger increase than in recent months, driven by a 4.6 per cent rise in vegetable prices.

Prices in the restaurants and hotels category, as well as the education sector, also rose, while prices in the transport sub-category fell by 3.4 per cent and those in the furnishing and home equipment sector declined by 3.5 per cent.

On a month-on-month basis, prices increased 0.1 per cent in August.

Inflation has remained relatively low in Saudi Arabia this year compared with global levels.

In its latest country report, the International Monetary Fund forecast Saudi inflation will average 1.9 per cent in 2024 and 2 per cent in 2025.