DUBAI (Reuters) – Saudi Arabia’s annual inflation rate eased to 2.7% in March from 3% in February, government data showed on Thursday, driven mainly by an increase in housing rents.
Housing, water, electricity, gas, and other fuels rose 7.4% from a year earlier.
Overall rents for housing increased by 8.7% in March from a year earlier, driven by a 22% increase in rents for apartments, and served as the biggest driver of inflation due to their relative high weighting of 21% in the Saudi consumer basket.
Food and beverage prices, which were the main driver of inflation during much of 2022, rose 2.3% from the same period a year earlier, while restaurants and hotel prices increased 6.3%.
However, compared to February, consumer prices increased by 0.1%, the General Authority for Statistics said, with housing, water, electricity, gas, and other fuels prices up by 0.4%, driven by an increase in rental costs.
In a research note last month, Abu Dhabi Commercial Bank said it sees a decelerating trend in inflation in Saudi Arabia over the coming months on the basis of “easing of global supply-side costs, the impact of higher interest rates on consumer demand and a strong base from the second half of 2022.”
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(Reporting by Rachna Uppal; Editing by Bernadette Baum)