Riyadh, Saudi Arabia — Saudi Arabia’s consumer price index experienced a slight decrease in October, dropping to 1.6 percent from 1.7 percent in September, according to the latest official data.
The General Authority for Statistics (GASTAT) reported that this decrease in inflation was primarily due to a 0.8 percent reduction in personal goods and services expenses in October. Additionally, the prices for furnishings and household equipment saw a monthly decline of 0.3 percent, alongside a similar decrease in clothing and footwear expenses.
Contrastingly, the food and beverage sector witnessed a 0.6 percent increase in prices month-on-month, while education expenses rose by 0.9 percent.
This stability in inflation aligns with predictions from the International Monetary Fund (IMF). In June, the IMF forecasted an average inflation rate of 2.8 percent for Saudi Arabia in 2023, despite the global economic challenges.
The IMF had previously noted in April that countries like Saudi Arabia, an oil-exporting nation, were likely to see low increases in both headline and core inflation.
This is attributed to factors like subsidies and price caps on certain products, the strength of the US dollar (to which many Gulf currencies are pegged), and a limited share of food in the consumer price index basket, helping to mitigate imported inflation pressures.
However, on an annual scale, October’s overall inflation rate in Saudi Arabia marked a 1.6 percent increase compared to the same period last year. This rise is mainly due to higher housing rent prices, which surged by 9.3 percent.
“Rent prices were the main driver of the inflation rate in October 2023, given their significant weight of 21 percent in the Saudi consumer basket,” GASTAT noted in their report.
Year-over-year, food and beverage costs rose by 0.8 percent, largely driven by a 4.4 percent increase in milk products and egg prices. In contrast, the prices for furnishings, household equipment, and maintenance fell by 3.1 percent compared to October of the previous year.
In a related report, GASTAT also disclosed that Saudi Arabia’s wholesale price index (WPI) rose by 1 percent in October compared to the same month last year, with a notable 14.5 percent increase in dairy product prices.
Compared to September 2023, the Kingdom’s WPI experienced a 0.5 percent rise due to a 1.8 percent surge in the prices of transportable goods.