Saudi Arabia: Inflation drops to lowest level since February in May
Latest reading: Inflation dropped to 2.2% in May, easing slightly from April’s 2.3%. May’s figure marked the lowest inflation rate since February, but was still one of the highest since summer 2023. After rising for seven months due to a weaker U.S. dollar—to which the Saudi riyal is pegged—food price pressures eased. Cost growth of housing and utilities also continued to cool, returning to more sustainable levels after booming on population growth and government-backed infrastructure projects.
The trend was unchanged, with annual average inflation coming in at April’s 1.9% in May.
Finally, consumer prices rose 0.07% over the previous month in May, coming in below the 0.32% increase seen in April. May’s result marked the weakest reading since December 2024.
Outlook: As has been the case in past years, inflation should remain moderate compared to other emerging markets in the coming quarters. Government subsidies and the U.S. dollar will reduce volatility in consumer prices.