A significant drop in Saudi education & housing prices brings inflation close to zero

The Saudi General Authority for Statistics released data in August that showed indications that highlighted Saudi Arabia’s considerable drop in education and housing prices, which brought inflation rates to near zero.

Contrary to rising trends (inflation rate) globally, the CPI in Saudi Arabia slowed in August to 0.3% YoY.

Lower education prices, notably lower prices for pre-primary, primary, and middle and secondary education were the major contributor to the reduction in inflation in August, which was 0.1 percent every month.

Among the sub-indicators of inflation, the Department of Education declined by 7.8%, affected by a decrease in the prices of pre-primary and primary education by 13.4%, and middle and secondary education by 7.2%.

The housing, water, electricity, gas, and other fuels sector also recorded a 3.5% decrease, affected by a 4.2% drop in housing rental prices.

The authority indicated in a report, today, Wednesday, that transportation prices increased by 6.5%, and the prices of food and beverages increased by 1.9%.

The authority explained that the transport sector was affected by the increase in operating prices of personal transport equipment by 21.9%,

this in turn was affected by the increase in fuel and lubricant prices for personal transport equipment by 44.3% and the increase in fuel prices.

This section had a significant impact on the rise in annual inflation due to its weight in the index.

The Food and Beverage division posted a 1.9% increase, weighed down by a 2% rise in food prices. The Tobacco division recorded a 0.6% increase, impacted by a 1.3% increase in cigarette prices.

The Miscellaneous Personal Goods and Services division was up 0.3%, weighed down by a 4.7% hike in maid application fee rates, including visa fees.

The restaurants and hotels section increased by 0.6%, affected by the increase in the prices of hotel services and furnished apartments by 2.4%.

Monthly, the CPI was relatively stable during August 2021, rising by 0.1% compared to July 2021.

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