Abu Dhabi’s GDP grew 3.3% in Q1, driven by non-oil sectors

RIYADH: Saudi Arabia’s annual inflation rate reached 1.5 percent in June 2024 compared to the same month last year, according to the latest data, mainly due to the increase in housing costs.

The report of the Central Statistical Office emphasized that the 8.4 percent increase in the prices of apartments, water, electricity, as well as gas and other fuels contributed significantly to the increase in inflation.

Real rents for apartments rose by 10.1 percent, while rents for villas rose by 7.9 percent. The significant share of this category in the overall index had a significant impact on the inflation rate.

Saudi Arabia’s inflation rate, while affected by domestic factors such as housing and fuel costs, remains relatively moderate compared with other Gulf Cooperation Council countries, which face varying inflationary pressures due to different economic policies and market conditions.

According to the GASTAT report, food and beverage prices also rose by 1.1 percent, driven by a 6.5 percent increase in vegetable prices. Prices in restaurants and hotels rose by 2.4 percent, driven by a 9.8 percent increase in accommodation prices.

The education sector grew by 1.1 per cent, mainly due to a 4.1 per cent increase in fees for secondary and upper secondary education.

Prices for furniture and home furnishings fell by 3.7 per cent, driven by a 6.0 per cent drop in the prices of furniture, carpets and flooring.

Clothing and footwear prices fell by 3.6 percent, while ready-made clothing prices fell by 6.3 percent.

Transportation costs also fell 2.7 percent, mainly due to a 4.6 percent drop in vehicle purchase prices. Communication services saw a slight decrease of 0.1 percent.

Monthly inflation

In June, the consumer price index recorded a slight increase of 0.1 percent compared to the previous month.

This monthly increase was primarily influenced by a 0.5 per cent increase in the prices of apartments, water, electricity, gas and other fuels, caused by a 0.7 per cent increase in actual rents and apartment prices.

The report also noted slight increases in the food and beverages (up 0.1%), restaurants and hotels, and personal goods and services (both 0.3%) categories compared to the previous month.

Meanwhile, clothing and footwear prices fell 0.2 percent. Furniture, household appliances and maintenance fell 0.5 percent. Recreation and culture prices fell 0.3 percent, and communications also fell 0.3 percent. Health care spending fell 0.1 percent, and tobacco prices fell 0.2 percent.

Prices for education and transportation products remained stable.

Wholesale Price Index

In another report, GASTAT revealed that the wholesale price index increased by 3.2 percent in June compared to the same month of the previous year.

The increase was mainly due to a 13.4 percent increase in the prices of basic chemicals and an 11.9 percent increase in the prices of refined petroleum products.

The other transport goods category saw an increase of 8.0 per cent, largely due to price increases.

Prices for food products, beverages, tobacco and textiles rose by 1.3 percent, with prices for leather, leather goods and footwear rising by 6.6 percent and prices for grain mills, starch and other food products rising by 4.6 percent.

However, on a month-on-month basis, the WPI fell by 0.1 per cent in June compared to May, attributed to a 0.3 per cent decline in the prices of ores and minerals, food products, beverages, tobacco and textiles.

Base metal prices fell 0.6 percent, while agricultural and fisheries prices rose 0.4 percent, driven by a 1.8 percent increase in live animal and animal product prices.

Average prices

A separate GASTAT bulletin revealed significant changes in the average prices of goods and services in Saudi Arabia in June 2024.

The data, which reflects month-on-month price changes, revealed both increases and decreases across categories, reflecting dynamic market conditions.

Many goods and services saw significant price increases in June compared to May 2024.

The highest increase was recorded by furnished apartments (22.47%), followed by hotel accommodation (20.38%), Indian pomegranates (8%), local cucumbers (7.24%) and local figs (7.23%).

Prices of domestic electric cables with diameters of 99 mm, 300 mm and 120 mm increased by 3.39 per cent, 3.37 per cent and 3.10 per cent, respectively.

On the other hand, several items saw significant price declines during the same period. Local melons saw the biggest drop of 16.39 percent, followed by imported onions at 14.15 percent, local onions at 11.52 percent, Lebanese peaches at 9.51 percent and Pakistani mangoes at 8.79 percent.

The prices of aluminium fell slightly by 0.92 per cent, 6 mm thick reinforcing steel by 0.80 per cent, coal by 0.10 per cent and 15 cm thick black block by 0.02 per cent.

The reports provide a comprehensive overview of price movements in Saudi Arabia, reflecting the various factors that affect inflation and the cost of living in the Kingdom. The data highlighted the complexity of the economic landscape, with significant differences across sectors and categories.