Higher housing and fuel costs drive Saudi inflation

• Consumer price index at 1.9%
• Up from 1.5% a year earlier
• Measures to tackle rising rents

Saudi inflation increased to 1.9 percent in November, driven by higher rent and fuel prices, according to government data.

The country’s consumer price index stood at 1.5 percent in November 2024. However, CPI has slowed from 2.2 percent in October and is at its lowest level since February.

The cost of housing, water, electricity, gas and other fuels surged by 4.3 percent, largely because of rising residential rents, the General Authority for Statistics said in its latest report.

The Saudi government is working on measures to tackle the rise in housing costs, which has been described by Crown Prince Mohammed bin Salman as “unacceptable”.

Saudi homeownership has risen from about 50 percent in 2020 to nearly 65 percent at the end of 2024. The government expects the rate to hit 70 percent in 2030.

The Saudi Ministry of Finance’s budget statement for 2026 predicts that inflation for the full year 2025 will be 2.3 percent, describing this as “relatively acceptable” compared with global inflation. 

“This is due to the kingdom’s implementation of various fiscal and monetary policies aimed at stabilising prices and mitigating their increases, along with the continued improvement in economic conditions,” the ministry said.

The Saudi government expects inflation to hit 2 percent in 2026, 1.8 percent in 2027 and 1.9 percent in 2028.

The International Monetary Fund is forecasting inflation at 2.1 percent in 2025 and 2 percent in 2026. 

Saudi Arabia’s economy grew by 5 percent in the third quarter. Oil-related growth surged as output increased, according to a government estimate released in October.

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