Saudi Arabia: Inflation comes in at highest level since June 2023 in March
Latest reading: Inflation inched up to 2.3% in March from February’s 2.0%. March’s reading was the highest inflation rate since June 2023; food prices rose at the sharpest pace in two years, likely reflecting higher import costs as a result of the recent depreciation of the U.S. dollar, to which Saudi Arabia’s currency is pegged.
The trend pointed up slightly, with annual average inflation coming in at 1.8% in March (February: 1.7%).
Finally, consumer prices rose 0.26% over the previous month in March, picking up from February’s 0.17% rise.
Outlook: Inflation will remain moderate in 2025, averaging around 2%. Cost pressures for housing should ease, despite remaining acute as a result of a booming population. Government subsidies for fuel will also help to keep a lid on price pressures. Unexpected depreciations in the U.S. dollar—to which the Saudi riyal is pegged—amid increasingly erratic U.S. economic policymaking poses an upside risk.