Prime Highlights:
Saudi Arabia’s inflation rate rose by 1.7% in 2024, with housing rents rising by 10.6%.
The housing, water, electricity, gas, and fuel sector saw an 8.8% price increase.
Despite the rise, Saudi Arabia’s inflation remained one of the lowest in the region and globally.
Key background:
Saudi Arabia’s consumer prices rose by 1.7% in 2024, driven largely by increased housing-related costs, according to the General Authority for Statistics (GASTAT). This marks a notable rise from the previous year, with housing rental prices experiencing a significant surge of 10.6%. The broader housing category, which includes water, electricity, gas, and other fuels, saw a collective price increase of 8.8%, contributing heavily to the overall inflationary pressure on households.
Despite this uptick, Saudi Arabia’s inflation rate remains among the lowest in the Middle East and globally, a testament to the Kingdom’s proactive economic policies. This is particularly notable given the global inflationary pressures observed in recent years. The inflation rate for 2024 came in lower than earlier forecasts made by the World Bank, which predicted a 2.1% increase. These projections also anticipated a slight rise to 2.3% for 2025, both of which were below the Gulf Cooperation Council (GCC) average.
In addition to housing, GASTAT’s report highlighted price increases in several other sectors. Food and beverage prices rose by a moderate 0.8%, while restaurant and hotel prices went up by 2%. Educational expenses also saw an increase of 1.3%, reflecting ongoing price pressures across various sectors. On the other hand, several categories recorded price declines. Clothing and footwear prices fell by 3.4%, with a 5.8% drop in ready-made clothing. Similarly, prices for furnishings and household equipment decreased by 3.4%, and transportation costs dropped by 2.4%.
In December 2024, inflation remained steady at 1.9% year-on-year. Housing costs continued to be the primary driver, with rents increasing by 10.6%, and villa rents rising by 9.9%. The housing sector was responsible for 25.5% of the inflationary weight in December. Other categories, including food and beverages, saw modest increases, while transport costs declined by 2.5%. This nuanced inflationary trend underscores the complexity of price movements across different sectors of the Saudi economy.
