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Saudi Arabia’s inflation reaches 2.3% in August 2025 according to the updated methodology

15-09-2025

The General Authority for Statistics (GASTAT) announced the Consumer Price Index (CPI) for August 2025, recording an increase of 2.3% compared to the same month of the previous year, based on the updated CPI methodology. This methodology enhances the availability of more comprehensive, timely, and accurate data on inflation trends. It also provides flexibility in capturing changes in spending patterns and measuring the impact of price movements for goods and services in retail markets on household consumption expenditure. This step comes as part of GASTAT’s continuous efforts to develop and improve statistical products and indicators, in line with international standards, and to provide high-quality, comprehensive, and reliable data that support policymakers in shaping economic and social decisions aligned with Saudi Arabia’s sustainable development plans and Vision 2030 goals. 
In this regard, GASTAT explained that the updated CPI methodology aims to improve the accuracy of measuring actual inflation in Saudi economy, consistent with best global practices and relevant international guidelines. Key updates include enhancements in price data collection methods, consumer basket weights, and variation of data sources. The new weights are derived from the 2023 Household Income and Expenditure Survey, in addition to household final consumption expenditure in the national accounts, data from Ejar platform, and other administrative records from various entities. Furthermore, the reference year of the index has been updated from 2018 to 2023, ensuring that the CPI better reflects actual spending patterns.

In the same context, GASTAT expanded the geographical coverage of points of sale to ensure comprehensive population coverage and a diversity of consumer categories. Using geospatial mapping techniques, the sampling frame was updated through reviewing coverage levels, increasing the number of outlets, and redistributing them to reflect population density and concentration across cities in the Kingdom. GASTAT also adopted the annual chain-linking methodology, a statistical approach that updates the CPI basket weights annually based on household final consumption expenditure data derived from national accounts, rather than relying on a fixed base year with unchanged weights for several years. This approach provides a consistent time series that better reflects economic realities and offers greater flexibility in capturing rapid market shifts and economic transformations.

GASTAT indicated that the expansion included increasing the number of retail outlets covered, from 32 thousand under the previous methodology to 82 thousand in the updated framework, and raising the sample of points of sale from 8,700 to 14 thousand. The number of items in the consumer basket was also expanded to 582, compared to 490 previously, in line with updated consumer behavior and preferences. Furthermore, the geographical scope of coverage was broadened by increasing the number of cities from 16 to 23 cities, enabling the publication of index results at the level of all administrative regions in the Kingdom. The updated methodology also incorporated the latest United Nations Classification of Individual Consumption by Purpose (COICOP 2018), with new levels added for index calculation and result generation, while maintaining linkage with the previous edition (COICOP 1999).

In conclusion, it is worth noting that the CPI methodology update forms part of GASTAT’s ongoing efforts to provide comprehensive, reliable, and accurate statistical indicators that reflect consumption patterns and price movements in Saudi economy. These improvements strengthen support for policymakers, analysts, and specialists in monitoring price developments and in advancing effective economic and social planning.
 

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