Video|17 April 2025

Inflation is on the rise in Saudi Arabia, should we be worried?

Inflation is on the rise in Saudi Arabia, should we be worried?


Saudi Arabia’s inflation rose to 2.3% in March—its highest level since July 2023—driven mainly by a faster rise in food and beverage prices. While housing rents remain the primary driver of inflation, they have eased modestly since November. Inflation is expected to average 2.2% in 2025. Elsewhere in the region, inflation in March declined to 3.3% in Israel and 1.6% in Jordan.


The US and Iran held nuclear talks for the first time since the US exited nuclear deal in 2018. The talks introduce potential upside risks for Iran’s economic outlook. However, we are not optimistic and a collapse in negotiations could even trigger more severe sanctions. For now, our baseline forecast remains unchanged, with GDP growth expected at 2.5% in 2025 and 1.6% in 2026 with the economy continuing to be hobbled by US sanctions, persistent inflation and domestic challenges.


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