دبي – The Kingdom of Saudi Arabia maintained its annual inflation rate at a steady 1.8 percent during August, extending this stability for the fourth consecutive month. This consistency occurred despite significant geopolitical tensions and economic pressures stemming from regional conflicts involving Iran. According to the latest data released on Tuesday by the General Authority for Statistics, the consumer price index recorded a slight monthly increase of 0.1 percent compared to July.
The authority clarified that the stability in the annual inflation rate was supported by a deceleration in the growth rates of two major weighted groups within the consumer basket. Specifically, the housing, water, electricity, gas, and other fuels group saw its annual growth slow to 3.9 percent in August, down from 4.2 percent in July. On a monthly basis, this group rose by 0.2 percent.
Similarly, the food and beverages group experienced a slowdown in annual price increases, dropping to 1.4 percent in August from 1.5 percent in July. Prices in this sector actually fell slightly by 0.1 percent on a monthly basis when compared to the previous month. These trends helped anchor overall inflation levels against external shocks.
Rising Transport Costs
In contrast, the transport group, which is the third largest by weight, showed a notable acceleration in annual growth. The rate reached 2.0 percent in August, up from 1.4 percent in July, marking the highest annual growth since February 2024. Monthly prices for transport also increased by 0.6 percent compared to July, contributing to the broader economic landscape.
Other sectors witnessed varied movements. Prices for furniture and household appliances decreased by 0.6 percent, while clothing and footwear prices dropped by 0.5 percent. Restaurant and accommodation services also saw a monthly decline of 0.4 percent. These decreases partially offset the upward pressures seen in housing and transport sectors during the reporting period.
Central Bank Assurance
Ayman Al-Sayari, Governor of the Saudi Central Bank, reassured markets that inflation remains under control due to the strength and stability of the local economy. Speaking at the G20 finance ministers and central bank governors meeting in the United States, he noted that the average inflation rate for the first seven months of 2026 stood at 1.8 percent.
However, Al-Sayari warned of potential inflationary pressures in the near future. He highlighted that geopolitical escalation and external developments could lead to higher global shipping and insurance costs. Consequently, he emphasized the need for continued monitoring and hedging strategies to ensure price stability across all economic sectors moving forward.
This story was produced in the newsroom from the disclosed sources named above.
