Saudi Arabia: Inflation rises to over one-year high in July
August 16, 2022
Consumer prices rose 0.51% in July over the previous month, accelerating from the 0.23% rise recorded in June. July's uptick marked the highest reading since July 2020. The result was driven by rising prices for transport, hospitality, energy and food. Meanwhile, prices for furnishing, household equipment, personal goods and communication declined.
In year-on-year terms, inflation rose to 2.7% in July, above June’s 2.3%. July's result was the highest inflation rate since June 2021. Meanwhile, the trend pointed up slightly, with annual average inflation coming in at 1.5% in July (June: 1.4%).
Inflation is likely to peak in Q3 and moderate towards the end of the year. The government’s cap on petrol prices, together with higher interest rates and moderating commodity prices in recent months, should lower inflation. That said, supply bottlenecks and rising demand remain upside risks.