Saudi Arabia’s annual inflation rate inched up to 2.3% in June 2025 from 2.2% in the previous month. Price growth accelerated for tobacco (0.5% vs 0.3%), education (1.4% vs 1.3%), and miscellaneous personal goods and services (4.1% vs 4.0%). Despite a slight moderation in the housing and utilities category - easing to 6.5% from 6.8% - it remained the main driver of inflation. The continued upward pressure was primarily due to a 7.6% increase in rents paid for housing, supported in part by a 7.1% rise in villa rental prices. This subindex carries a substantial 25.5% weight in the consumer price basket. Meanwhile, inflation eased for food and non-alcoholic beverages (1.5% vs 1.6%) and restaurants and hotels (1.6% vs 1.8%). At the same time, deflation persisted for clothing and footwear (-0.6% vs -0.9%), furnishings and household maintenance (-1.7% vs -2.5%), and transport (-0.7% vs -0.8%). On a monthly basis, the CPI rose 0.2%, following a 0.1% increase in May.