SAMA Governor: Inflation Under Control

Bloomberg – Saudi Central Bank Governor Ayman Al-Sayari confirmed that inflation in Saudi Arabia remains under control, but rising global shipping and insurance costs due to external developments could generate pressure on prices in the near term.

Al-Sayari explained during the G20 finance ministers and central bank governors meeting in the United States that the Saudi economy has maintained price stability, with the annual average inflation rate reaching 1.8 percent in the first seven months of 2026.

Housing costs remained the most prominent source of price pressures, with rents rising by 4.3 percent and prices for housing, water, electricity, gas, and other fuels increasing by 4.2 percent, while prices for food, beverages, and transport also rose.

Warnings from the SAMA governor are gaining significance as transport and insurance costs have surged since the outbreak of the Iran war. The cost of chartering ultra-large crude oil tankers on the Gulf-China route jumped to $629,000 by late August, up from around $200,000 before the war erupted in February, while the cost of shipping a 40-foot container rose to approximately $4,472 from $1,898 during the same period, according to Bloomberg.

Saudi Arabia is close to approving a state-backed initiative to address rising insurance costs and risks associated with maritime shipping. The initiative aims to provide a more stable mechanism for managing shipping risks and reducing the impact of transport and insurance costs on the private sector and consumers, as part of broader measures taken by the Kingdom to safeguard supply chains from the war’s repercussions.

The International Monetary Fund predicted in July that inflation in Saudi Arabia would rise slightly to 2.2 percent this year, up from 2 percent in 2025, before slowing to 2.1 percent, amid a partial balance between rising shipping and insurance costs on one hand, and slowing rent inflation and caps on prices for certain fuels and food items on the other.