Economy

Inflation Expected to Stabilize at 2.1% This Year

Al-Madinah - Riyadh

Date published: July 4, 2026 23:58 KSA

Jadwa Investment expects the average inflation rate in the Kingdom to reach 2.1% during 2026, compared to its previous estimate of 1.7%, as a result of the partial transmission of cost pressures that accumulated during the closure of the Strait of Hormuz to consumer prices gradually during the second half of the year, without assuming continued disruptions.

The firm noted that the easing of tensions and the reopening of the Strait of Hormuz would support a gradual decline in cost pressures, but the return of supply chains to normal levels will take some time. In contrast, local factors, led by stable fuel prices and a slower pace of rent increases, are expected to help limit the pass-through of cost pressures to consumer prices, supporting inflation remaining at moderate levels in the coming period, with expectations still linked to the path of global geopolitical developments.

Inflation in the Kingdom, easing tensions supports a gradual decline in cost pressures. Return of supply chains to normal levels takes some time. Stable fuel prices and slower pace of rent increases. Limit the pass-through of cost pressures to consumer prices. Inflation remains at moderate levels in the coming period.

Inflation rate, Strait of Hormuz