Saudi Gazette report

RIYADH — Saudi Arabia's annual inflation rate dropped to 2.1 percent in July 2025 from 2.3 percent in the same month last year. According to the monthly report of the General Authority for Statistics (GASTAT) released on Thursday, the Consumer Price Index (CPI) or inflation dropped to a 5-month low since February this year.

The CPI also showed stability on a monthly basis, with prices across most categories remaining largely unchanged from June to July 2025. The Wholesale Price Index (WPI) remained stable at 2.1 percent in July, while recording a slight monthly decline of 0.1 percent compared to June.

According to the data released by the GASTAT, housing, water, electricity, gas, and fuel prices were the main driver of the increase, reaching 5.6 percent, driven by a 6.6 percent rise in housing rents in July. However, experts noted that the continued decline in rent inflation from 7.6 percent in June is a positive indicator of the success of the Kingdom's efforts to reform the real estate market and increase housing supply.

Food and beverage prices also rose by 1.6 percent, driven by a 2.6 percent increase in poultry meat prices, and a 4.3 percent increase in miscellaneous personal goods and services prices, with jewelry, watches, and antiques prices rising by 24.7 percent.

Prices in the restaurants and hotels category rose by 1.4 percent, driven by a 1.5 percent increase in restaurant and cafe prices. Meanwhile, the education category rose by 1.1 percent, impacted by a 3.8 percent increase in higher education tuition fees.

In contrast, prices in the home furnishings and equipment section declined by 2 percent, impacted by a 3.9 percent decline in furniture, carpets, and floor coverings. Prices in the clothing and footwear section also declined by 0.4 percent, impacted by a 1.3 percent decline in ready-made garments. Transportation prices also decreased by 0.3 percent, impacted by a 1.6 percent decline in vehicle purchase prices.

These results are consistent with the International Monetary Fund's forecast that inflation in the Kingdom will remain under control at around 2 percent in 2025 and 2026.

It is noteworthy that the CPI measures changes in the prices paid by consumers for a fixed basket of 490 goods and services, while the WPI tracks changes in pre-retail prices for a fixed basket of 343 items.