Saudi Arabia: Inflation stabilizes in July
Latest reading: Consumer prices rose 1.8% on a year-on-year basis in July, stable from the prior month’s reading. July’s reading was the strongest since December 2025. Rising rent prices made housing and utilities the main contributor to inflation, as tight supply continued to fall short of high demand from both Saudis and foreign residents.
Relative to the prior month’s figures, there were higher price pressures for food and non-alcoholic beverages (+1.5% in annual terms vs +1.4% in June) and housing and utilities (+4.2% vs +3.5% in June). In contrast, there were reduced price pressures for transport (+1.4% vs +1.7% in June) and recreation and entertainment (+2.4% vs +2.5% in June). Finally, the change in clothing and footwear prices was the same as in the prior month (-0.4% in July and June).
Lastly, consumer prices rose 0.19% in July on a month-on-month basis, following a 0.16% increase in the previous month.
Panelist insight: On the inflation outlook, Emerging Market Watch analysts commented:
“The war in Iran has pushed up crude oil prices but fuel subsidies and ample supply of crude to the domestic refineries have shielded Saudi consumers from higher oil prices and fuel shortages. The closure of the Hormuz Strait will drag on the global supply of fertilizers (of which GCC countries are major exporters) and will drive up global prices of food, of which GCC countries are major importers. Overall, we believe that the currency peg will help contain inflationary pressures, but the closure of the Hormuz Strait and the Houthi naval blockade announced in July will hamper imports and raise inflationary pressures in the kingdom.”