Saudi inflation rate decreases to 2% in August, the lowest level in 14 months

In August 2023, the Saudi Consumer Price Index (CPI) increased by 2.0%, compared to August 2022, down from 2.3% in the previous month (July 2023). The main driver of CPI inflation in July were higher prices of housing, water, electricity, gas, and other fuels (9.0%) and prices of food and beverages (0.4%).

Rents main driver of inflation in August 2023

Actual rents for housing increased by 10.8% in August 2023, reflecting the increase in rents for apartments by 22.5%. Prices for rents were the main driver of the inflation rate in August 2023 due to their high relative importance in the Saudi consumer basket (with a weight of 21.0%).

Food and beverages prices increased by 0.4%, due to rising milk, milk products and eggs prices (5.9).

Transport prices increased by 0.5%, mainly due to the increase in transport services prices (3.6%).

Restaurants and hotels prices increased by 2.7%, due to the increase in catering services prices by 2.1%.

Education prices increased by 1.8%, mainly resulting from the increase in tertiary education prices by 5.5%.

In contrast, furnishings, household equipment & maintenance prices decreased by 3.2%, due to the decrease in furniture and furnishings, carpets and other floor coverings (-4.6%). Clothing and footwear prices decreased by 4.2% due to the decrease in garments prices (-6.2%).

Prices stable compared to July 2023

Compared to July 2023, consumer prices remained stable in August 2023 (0.03% increase).

The monthly CPI was affected by the increase in housing, water, electricity, gas, and other fuels prices by 0.7%, as a result of the increase in actual rents for housing by 0.8%.

Restaurants and hotels prices increased by 0.6%.

Prices of Food and beverages decreased by 0.2%, furnishings, household equipment & maintenance decreased by 0.3%, clothing and footwear (-0.3%), personal goods and services (-0.3%), transport (-0.4%), communications (-0.3), Health (-0.2%), recreation & culture (-0.1).