RIYADH: Saudi Arabia’s producer prices climbed 7.5 percent year on year in May as higher manufacturing costs, led by chemicals and refined petroleum products, pushed wholesale prices higher, official data showed.
Manufacturing, the largest component of the Producer Price Index, rose 8 percent from a year earlier, according to the General Authority for Statistics. The increase was led by a 15.2 percent jump in chemicals and chemical products, followed by a 12.7 percent rise in wearing apparel and a 10.7 percent increase in refined petroleum products.
The latest Producer Price Index data comes after Saudi Arabia’s annual consumer inflation held steady at 1.8 percent in June, with housing rents and personal care costs remaining the main drivers of price growth.
The increase underscored continued cost pressures across key industrial sectors even as consumer inflation remained relatively contained.
In its latest PPI report, GASTAT said: “This increase was driven by an 8 percent rise in manufacturing prices, a 2 percent increase in prices of electricity, gas, steam, and air conditioning supply, and an 8.3 percent rise in prices of water supply, sewerage, waste management and remediation activities.”
Prices for basic metals climbed 9.8 percent, while food products rose 3.2 percent during the same period.
The report also highlighted declines in several manufacturing industries. Prices for fabricated metal products, excluding machinery and equipment, fell 4.8 percent year on year, while furniture prices declined 1.9 percent. Prices for other economic activities also fell 5.5 percent.
Outside manufacturing, electricity, gas, steam and air conditioning supply costs increased 2 percent in May from a year earlier. Prices for water supply, sewerage, waste management and remediation activities rose 8.3 percent.
Monthly prices retreat
On a monthly basis, however, the Producer Price Index fell 1.8 percent in May compared with April, reversing part of the gains recorded in previous months. The decline was mainly driven by a 2 percent drop in manufacturing prices, reflecting a 6.3 percent decrease in refined petroleum products, alongside lower prices for fabricated metal products, other economic activities, and wearing apparel.
The monthly decline was partly offset by a 0.5 percent increase in chemicals and chemical products and a 9.5 percent rise in basic metals.
Water supply, sewerage, waste management and remediation activities increased 1.9 percent from April, while electricity, gas, steam and air conditioning supply prices were broadly unchanged.
The Producer Price Index is one of the key indicators used to assess inflationary pressures within the economy, tracking changes in prices received by producers before goods reach consumers. The data provide an important measure of cost trends across industrial sectors and help gauge broader economic conditions alongside consumer inflation.
Producer prices are closely watched by economists because they can signal future inflationary trends before higher production costs filter through to businesses and consumers.
