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Investing.com -- Saudi Arabia’s headline inflation rate remained steady at 2.3% year-on-year (y/y) in April, matching its fastest pace in almost two years. The inflation is expected to stay within the 2.0-2.5% y/y range for most of this year, before falling under 2% y/y heading into 2026.
The inflation rate for March was slightly higher than both the forecast by Capital Economics and the LSEG consensus, which predicted a 2.2% y/y inflation rate. On a seasonally adjusted month-to-month annualized basis, prices increased by 3.0%.
A detailed analysis revealed that inflation for food and beverages continued to rise, moving from 2.0% y/y in March to 2.2% y/y in April. This is the highest rate since March 2023. However, this increase was balanced by a slight decrease in non-food inflation.
While most non-food price categories saw a minor slowdown in inflation, the housing and utilities inflation notably eased to its lowest level since 2022. This is possibly due to the latest housing reforms in the Kingdom (TADAWUL:4280), which aimed to cap rents and boost housing supply, thereby reducing housing cost pressures.
Capital Economics stated, "We expect that the headline inflation rate will hover around the 2.0-2.5% y/y range over the coming months. But it should then fall back below 2.0% y/y into 2026 due to weaker transport and housing and utilities inflation."
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