Housing Costs Drive Saudi Inflation Up to 2.3% in June

Saudi Arabia’s annual inflation rate rose to 2.3% in June 2025, up slightly from 2.2% the previous month. The increase was driven primarily by rising housing and utility costs, which saw a 6.5% year-on-year jump. Within this category, housing rents remained the largest contributor, rising by 7.6%, while rental prices for villas specifically increased by 7.1%. Housing and utilities account for 25.5% of the consumer price index, underscoring their strong influence on overall inflation trends.

Other categories also contributed to the uptick in inflation. Food and beverage prices rose by 1.5%, due largely to a 2.4% increase in meat and poultry costs. Personal goods and services registered a 4.1% rise, led by a sharp 26.5% surge in the prices of jewellery, watches, and precious antiques. Restaurant and hotel prices climbed by 1.6%, with restaurant and café prices up by 1.9%. Education costs increased by 1.4%, reflecting a 5% rise in higher education fees.

Not all sectors saw price increases. Household furniture and furnishings declined by 1.7%, with carpets and floor coverings dropping by 3.6%. Clothing and footwear fell by 0.6%, led by a 1.4% decrease in ready-made garments. Transportation costs dropped by 0.7%, driven by a 1.7% fall in vehicle purchase prices.

On a monthly basis, consumer prices rose by 0.2% in June compared to May. The housing and utilities sector again led the increase with a 0.2% rise, including a 0.3% climb in actual housing rents.