Official data issued by the General Authority for Statistics in Saudi Arabia showed that the wholesale price index recorded an increase of 2.9% during January 2024, on an annual basis compared to the same month of 2023. This increase reflects changes in the costs of production and goods before they reach the final consumer, and is an important economic indicator for measuring inflation at the producer and company level.
Main reasons for the annual increase
According to the report, this growth is mainly attributed to the rise in prices of two key components within the index:
- Other transportable goods: Prices in this category rose by 4.9%, with the biggest driver of this increase being a 3.9% rise in refined petroleum product prices, in addition to a notable 18.4% jump in basic chemical prices.
- Agriculture and fishing products: This sector saw price growth of 4.2%, driven by a 5.8% increase in agricultural product prices and a 1.1% increase in live animal and animal product prices.
Analysis of other sectors
Other sectors also recorded significant increases that contributed to the overall growth of the index. Prices for "Metal Products, Machinery and Equipment" rose by 1.2%, driven by a 5.6% increase in basic metal prices. The "Food Products, Beverages, Tobacco and Textiles" category saw a slight increase of 0.3%, while prices for "Raw Materials and Minerals" declined marginally by 0.1%.
Economic context and the importance of the index
This rise in wholesale prices comes amid a global economic context marked by fluctuations in energy and raw material prices, which directly impact production costs in major economies like Saudi Arabia. The Wholesale Price Index (WPI) is a vital tool for policymakers and investors, providing a proactive view of potential inflation trends at the consumer price level (CPI). Increases in wholesale costs are often passed on to retail prices over time.
Government agencies, including the Saudi Central Bank (SAMA), closely monitor these indicators to ensure price stability and maintain balanced purchasing power, in line with the goals of Saudi Vision 2030 aimed at diversifying the economy and enhancing its financial stability.
Changes on a monthly basis
On a monthly basis, the wholesale price index recorded an increase of 1.5% in January 2024 compared to December 2023. The main driver of this monthly growth was the rise in prices of “other transportable goods” by 3.4%, as a result of an increase in the prices of refined petroleum products by 4.0% and basic chemicals by 9.5%.
This data provides a clear picture of price dynamics in the Kingdom’s production sectors, and underscores the importance of monitoring commodity prices and their far-reaching impact on all aspects of the local economy.
