Media Centre

Saudi: Inflation rate steady at 1.7% in September while rental prices remain its main driver

RIYADH — Saudi Arabia's Consumer Price Index (CPI) or inflation rate remained steady at 1.7 percent in September 2024, compared to September 2023, maintaining stability throughout the year.

This was revealed in the monthly statistical report, released by the General Authority for Statistics (GASTAT) on Tuesday. "This demonstrates the country's economic resilience and places its inflation rate among the most stable. It also underscores the effectiveness of Saudi Arabia's economic strategies and timely decisions in managing global inflation and price rises," the report pointed out.

Rental prices were the main driver of inflation in September 2024 compared to September 2023. The inflation rate is primarily attributed to the rise in the prices of housing, water, electricity, gas, and other fuels by 9.3 percent, as well as the increase in prices of food and beverages by 0.8 percent. Meanwhile, prices of transportation decreased by 3.3 percent.

The increase in housing, water, electricity, gas and other fuels section was affected by the increase in the group of rents paid for housing by 11.2 percent in September 2024. This is mainly caused by the increase in apartment rental prices by 10 percent, and the increase in this section had a significant impact on the continuation of the annual inflation pace for the month of September 2024 due to the weight formed by this section, which amounts to 25.5 percent.

Similarly, food and beverage prices increased by 0.8 percent, influenced by a 5.2 percent rise in vegetables prices. Prices in the restaurants and hotels sector also rose by 1.7 percent, driven by a 1.5 percent increase in catering service prices.

Meanwhile, the education sector witnessed an increase of 1.6 percent, due to a rise in the fees of intermediate and secondary education by 3.8 percent. On the other hand, prices of furnishing and home equipment decreased by 3.7 percent, influenced by a decline in furniture, carpets, and flooring prices by 7 percent. Similarly, prices of clothing and footwear decreased by 3.2 percent, influenced by a 5.5 percent decline in ready-made clothing prices. Transportation prices also decreased by 3.3 percent, affected by a 4.5 percent decrease in vehicle purchase prices.

Prices recorded an increase of 0.1 percent in September 2024 compared to the previous month of August. In September 2024, the consumer price index recorded a slight increase of 0.1 percent compared to August 2024. This monthly inflation index was influenced by a 0.6 percent rise in housing, water, electricity, gas, and other fuels, which in turn, was affected by a 0.8 percent increase in actual housing rents and prices, the GASTAT report pointed out.

The index also witnessed an increase in the prices of food and beverage by 0.3 percent, driven by a 1.6 percent rise in vegetables and prices. Restaurants and hotels along with personal goods and services both increased by 0.1 percent. However, the index witnessed a decrease in the prices of transportation by 0.4 percent, recreation and culture by 0.3 percent, furnishing and home equipment by 0.3 percent, clothing and footwear, by 0.2 percent, communications by 0.1 percent, and tobacco by 0.1 percent. On the other hand, prices of education and health did not show any significant change in September 2024, the report showed.

According to GASTAT, CPI measures the price of a fixed basket of 490 goods and services paid by consumers. The basket is selected based on a 2018 household income and expenditure survey, which determined the items and their respective weights. Prices are collected through on-site visits to sales points.