- Government data released on Thursday indicated that the annual inflation rate in Saudi Arabia reduced to 2.7% in March compared to 3% in February. The reduction was mainly due to a rise in housing rents, with housing, water, electricity, gas, and other fuels rising by 7.4% YoY.
- In March, housing rents surged by 8.7% YoY, propelled by a substantial 22% rise in apartment rents, which carried a significant weighting of 21% in the Saudi consumer basket. This increase was the primary contributor to inflation.
Why it matters
Consumer prices in Saudi Arabia increased by 0.1% in March, led by a 0.4% rise in housing, water, electricity, gas, and other fuels prices due to surging rental costs, according to the General Authority for Statistics. Abu Dhabi Commercial Bank predicted a decline in inflation in Saudi Arabia in the upcoming months due to the easing of global supply-side costs, higher interest rates, and a robust base from H2 2022.