Skip to content Skip to Search
Skip navigation

Saudi inflation eases to 1.5% – but tipped to rise this year

A Saudi woman shops for dairy products at a Riyadh supermarket. Wholesale price inflation for dairy products was 14.3% in December Reuters/Ahmed Yosri
A Saudi woman shops for dairy products at a Riyadh supermarket. Wholesale price inflation for dairy products was 14.3% in December
  • CPI was 1.7% in November
  • Wholesale prices rising sharply
  • Costs not yet passed on

Saudi Arabia’s year-on-year inflation rate eased to 1.5 percent in December 2023, from 1.7 percent the previous month, but prices are expected to rise more quickly this year as the country emerges from a slowdown. 

Housing costs were the main driver of increases in the consumer price index (CPI), according to the General Authority for Statistics. Overall rents rose by 9 percent and apartment rents were up 12.1 percent.

Prices for food and beverages rose by 1.2 percent. Costs dipped for several categories, including clothing, furnishings and household products, and transport. 

While the headline CPI rate has been trending down since January 2023, Saudi Arabia’s wholesale price index has risen sharply since June 2023. Inflation in wholesale prices stood at 3 percent year on year in December.

Prices for transportable goods were up 6.1 percent in December, driven by a 30.9 percent increase in the cost of basic chemicals.

The food products, beverages, tobacco and textiles category was up 3.4 percent. Much of that increase was down to a 14.3 percent rise for dairy products, said the General Authority for Statistics.

Government subsidies baked into food and petrol prices tend to lower price inflation in the wholesale index, but businesses have been reluctant to pass on higher costs over the past year as the Saudi economy slowed.

Riyad Bank, which publishes the Saudi Purchasing Managers’ Index with S&P Global, said rising demand was starting to give non-oil companies “greater confidence to pass on higher input costs to customers”. 

Its latest monthly report added: “Selling charges set by Saudi Arabian non-oil firms increased for the second month in a row in December, after a period where pricing strategies had been constrained by growing competition.”

“I would expect to see some uplift in the CPI in the months ahead,” said James Reeve of Jadwa Investment.

The consumer index is based on endpoint prices of 490 goods and services based a 2018 survey of household spending, while the wholesale index has used the pre-retail prices of 343 items since 2014. 

The World Bank said last week that it expects Saudi GDP to grow by 4.1 percent in 2024 and 4.2 percent in 2025, rebounding from a 0.5 percent contraction in 2023 caused by Opec+ output cuts.

Latest articles

Aircraft, Airliner, Airplane

Tunisair growth slows as costs rise

Tunisair’s revenue increased by only 3 percent year on year to TND695 million ($224 million) in the first half of 2024, as fuel costs rose and its market share shrank. Passenger numbers went up by 2 percent to 1.17 million, compared to 1.15 million a year ago, the state-run Tunis Afrique Presse reported. Average revenue […]

A cattle drive in the Pantanal region. Meat is a major component of Brazil's trade with Saudi Arabia

Brazil’s JBS to open Saudi food factory as trade ties deepen

Brazilian multinational JBS is to open a food factory in Saudi Arabia with an investment of SAR500 million ($133 million), in a further sign of the strengthening ties between the two countries. JBS, one of the largest meat and poultry producers in the world, will open the facility in Jeddah under its subsidiary Seara by […]

Architecture, Building, Convention Center

First Abu Dhabi revenue rises 16% on overseas growth

First Abu Dhabi (FAB), the UAE’s biggest lender, said revenues rose 16 percent year on year to AED15.7 billion ($4.3 billion) in the first half of 2024, driven by 30 percent annual growth in international franchise. Net profit increased 3 percent to AED8.4 billion in the first six month ended June 30, 2024, compared to […]

People, Person, Adult

Diriyah awards $2bn contract for Wadi Safar masterplan

The Public Investment Fund-backed Diriyah Company has awarded its largest single contract to date to a Saudi-Qatari joint venture for the Wadi Safar masterplan. The SAR8 billion ($2.13 billion) contract was awarded to the joint venture between Urbacon Saudi Company, the local unit of Qatar’s Urbacon International, and Saudi-headquartered Al Bawani Company, the state-backed Saudi […]