Significant Inflation Gap among 16 Cities, across the Kingdom

Inflation rate in the Kingdom climbed by 0.6% in 2021. The increase, according to the authorities, was primarily due to an increase in food prices, with as much as 18.78% relative weight in the index.

For its part, the transportation sector has a 13.05% relative weight in the index.

Both rose by 2.41% and 5.89%, respectively. On looking at the inflation rate at the level of the Kingdom’s cities, however, we see that there is a lot of variety, both at the level of cities, in general, and at the level of the index’s components, where the general inflation rate is calculated based on the change in the latter.

While the inflation rate in the Kingdom has reached 0.63%, it has posted 9.63 in Najran, according to the data.

Where Tabuk’s unemployment rate was at 4.48%. Sakaka’s unemployment rate rose to 2.37%.
In four cities, however, inflation was negative, hitting 2.53% in Abha, 1.49% in Jeddah, 0.91% in Hofuf, and 0.07% in Dammam.

Meanwhile 10 cities had higher inflation rates than the national average, Madinah and Taif had lower rates, in addition to the four cities, with recorded negative rates.

At the level of cities that experienced a significant variation in annual inflation rates compared to the general inflation rate, or at the level of the Kingdom, we find that the change occurred only recently, where, for example, the inflation rate in Najran was lower than the Kingdom’s inflation rate from January to October of the same year.

The city’s inflation rate was higher than the Kingdom’s, from November 2020 until September 2021, when it first began to change.

Up until September 2020, the inflation rate, in Sakaka, was lower than the national average.
From October 2020 to September 2021, the situation altered.

The inflation rate in Tabuk remained below the Kingdom’s average until December 2020, when the situation began to shift.

On the other hand, we find that the inflation rate in Jeddah was higher than or near to the general rate until January 2021, after which it began to diverge from the general rate, in February 2021, and remained negative until September 2021.

The same is true for Abha, where inflation was higher than or close to the average rate until February 2021, when it began to diverge, significantly, from the general rate, reporting a negative rate in the last three months, similar to Jeddah.

Cities with rate of inflation sharply contrasts with the Kingdom’s

All cities Jeddah Abha Tabuk Najran Sakaka
Jan 2020 0.73 0.77 0.82 1.35 -1.55 -0.42
Feb 2020 1.23 1.94 0.8 1.43 -1.75 -0.56
Mar 2020 1.48 1.71 1.19 1.42 -1.18 -0.23
Apr 2020 1.3 1.1 0.45 1.13 -1.38 0.33
May 2020 1.06 1.49 -0.1 -0.35 -2.19 -0.35
Jun 2020 0.522 0.367 -2.448 -0.547 -2.657 -0.232
July 2020 6.125 5.397 4.015 3.717 2.167 4.731
Aug 2020 6.164 5.463 4.319 3.27 3.447 5.263
Sep 2020 5.743 4.546 4.258 2.739 3.86 5.41
Oct 2020 5.757 5.357 4.941 3.724 4.845 5.759
Nov 2020 5.802 5.735 4.981 3.409 6.211 5.894
Dec 2020 5.329 5.082 3.976 3.707 6.576 5.693
Jan 2021 5.723 5.57 4.478 7.089 8.569 5.524
Feb 2021 5.249 3.392 0.287 7.166 10.03 6.528
Mar 2021 4.948 3.153 0.704 7.009 11.472 6.37
Apr 2021 5.258 3.557 0.957 7.821 13.018 6.818
May 2021 5.675 3.02 2.373 9.04 15.384 8.04
Jun 2021 6.161 3.411 4.369 9.258 14.875 8.327
July 2021 0.433 -2.081 -2.457 4.449 10.565 3.6
Aug 2021 0.269 -2.179 -2.602 4.13 9.754 3.01
Sep 2021 0.634 -1.491 -2.526 4.484 9.628 2.37

The effect of the value added tax (VAT) rise faded in the last three months (July, August, and September 2021), since the period from July 2020 to June 2021, was contrasted to a low level of prices prior to the implementation of the VAT increase, while the balancing process begins in July 2021.

Compared to pricing including V.A.T. at the two time periods’ respective levels.

We concluded that the performance of the parts that make up the commodity price index varies significantly from city to another.

For example, the food and beverage section have a higher inflation rate than the general average, in 5 cities, the highest of which was Najran with 26.63% and the lowest of which was Sakaka, with 2.69%.

It has a lower inflation rate in 11 cities, and it is negative, in three of them, namely Jizan, Abha, and Tabuk.

In the transportation department, inflation rates were higher than the national average, in ten cities, with Hail topping the list at 14.67%, followed by Najran at 13.92%, Abha at 12.72%, and Sakaka at 12.03%, all of which are higher than the department’s overall inflation rate of 5.88%.

As of the housing, water, electricity, gas, and other fuels section of the index, which have a relative weight of 25.5% and a negative inflation rate of 2.99% at the state level, we find that it increased by 17.94% in Tabuk, and a negative rate in the remaining 15 cities, with Abha leading the way with a rate of 12.59%.

Inflation rate in September 2021 on an annual basis (%) by cities
Inflation rate Food & Drinks Tobacco Clothes & Shoes Housing, water, electricity, gas and other fuels Furnishing and equipping the house. Health Transportation Communications Entertainment & Culture
Education Restaurants & Hotels Miscellaneous goods and services

Najran 1 26.63 17.82 14.07 -2.42 3.72 14.93 13.92 4.21 17.94 -1.37 17.45 5.47
Tabuk 4.48 -0.85 -0.05 -8.33 17.94 2.14 0.02 5.76 2.66 2.18 1.60 -0.11 -0.31
Sakak 2.37 2.70 0.00 -0.45 -0.28 1.21 -0.51 12.05 3.41 16.32 0.96 1.40 -0.40
Makkah 1.73 3.21 0.17 -3.94 -2.00 1.35 1.23 4.75 3.34 4.18 -3.40 2.81 3.40
Albaha 1.54 1.39 -0.56 -0.85 -4.56 1.52 -0.01 -0.45 3.62 -1.35 0.00 3.58 13.71
Arar 1.34 1.84 -3.04 -0.76 -0.99 1.50 -10.74 9.19 4.24 11.61 10.99 0.18 -0.22
Riyadh 1.30 3.38 0.00 -0.55 -0.68 0.54 0.52 7.38 1.61 -0.83 -2.04 -1.57 -0.11
Jizan 1.05 -0.22 -2.34 -0.48 -5.36 6.01 -2.87 8.78 5.21 -1.37 0.00 -0.01 6.66
Hail 1.00 1.40 2.28 -0.97 -1.12 -1.85 -0.02 14.67 3.19 0.38 21.26 0.58 -1.35
Buraydah 0.71 1.57 -2.86 -9.62 -1.77 1.53 1.09 8.49 3.66 6.29 10.03 4.27 0.05
Medina 0.51 0.92 -1.94 -1.22 -4.28 1.91 -1.99 9.43 3.02 -1.43 0.00 1.28 1.00
Taif 0.01 0.53 0.03 -0.37 -5.28 0.08 2.13 8.09 3.88 1.38 10.41 1.99 -0.38
Dammam -0.07 3.84 0.07 -1.31 -6.50 -1.29 0.70 5.51 4.85 5.02 9.71 1.40 -2.59
Hafuf -0.91 0.36 0.00 -4.23 -3.38 0.47 0.57 1.55 3.10 -1.67 2.73 -0.55 0.05
Jeddah -1.49 0.47 -0.75 -0.96 -6.30 0.84 2.06 2.07 3.12 -1.92 2.05 1.08 -5.35
Abha -2.53 -0.43 0.29 -0.41 -12.59 0.27 -1.36 12.72 2.62 7.92 -1.96 1.20 -2.42
All cities 0.63 2.41 0.34 -1.45 -2.99 0.68 0.51 5.89 2.78 1.09 0.46 0.70 -0.19