Saudi Arabia’s annual inflation rate was unchanged at 1.7% in September 2023 compared with the same month last year, mainly because of high and increasing housing costs, the General Authority for Statistics said Wednesday.

This segment registered a massive increase of 9.3% of the cost of shelter, water, electricity, gas, and other forms of fuels, which was critical in recording the inflation trend. In the meantime, housing tenancies increased by 11.2%, with house tenancies increasing by 10%. Its heavy weight within the overall consumer price index has resulted in having a sharp impact within this inflation level.

Housing prices received most of the attention, owing to insufficient supplies in the market, where growing demand had been spurred by population growth and the tremendous influx of expatriates seeking shelter in the Kingdom. The food and beverage industries increased by 0.8 percent. Restaurant and hotel services improved 1.7%. Of note, vegetable prices surged 5.2 percent within the food and beverage sector. Mostly because of a 1.5% increase in catering services, growth is said to be in the restaurant and hotel sectors.

On the other hand, furnishings and household equipment fell by 3.7 percent for the year due to a drop of 7 percent in the price level for furniture, carpets and floor coverings. The price level for apparel and footwear fell by 3.2 percent while clothing ready-to-wear prices dropped by 5.5 percent. Transport prices also fell by 3.3 percent, including vehicle prices which dropped by 4.5 percent.

Consumer prices rose by 0.1% on a monthly basis in September compared with August due mainly to a rise of 0.6% for housing- related costs. Food and beverages, restaurants and hotels, and personal goods and services were each up 0.1%.

The third report dealt with the Wholesale Price Index. GASTAT said that, during the third month of the year, wholesale prices are running 3.1 percent higher than in September last year; transportable goods were up by 8 percent, while basic chemicals and refined petroleum products rose by 12 percent. This is a disturbing picture about what’s going on in sectors across the Saudi economy.