June 2025 Inflation Rate Remains Stable at 5.4%
The June 2025 inflation rate has been released, showing a stable annual rate of 5.4%. However, on a sequential basis, it has increased by 40 basis points.
Breakdown of Price Increases
When comparing the June data to May, the main contributors to the price increase are:
- Clothing prices, up 1.6%
- "Restaurants and hotels" prices, up 1.1%
- Food prices, up 0.1%
These increases are largely driven by high demand ahead of the summer season and Eid celebrations. Notably, lamb and beef prices have risen by 1.8% and 1.5%, respectively. On the other hand, egg prices have decreased by 3.6%, poultry prices by 1.4%, and fresh fruit prices by 1.1%.
Year-over-Year Comparison
Compared to June 2024, the stability of the inflation rate can be attributed to:
- An acceleration in the price increase of the "Restaurants, cafes, and hotels" group (11% in June 2025 vs. 10.8% in May)
- A slowdown in the price increase of the food products group (6.4% in June 2025 vs. 6.7% in May)
While this may not reflect the consumer's experience at the market, the deceleration is largely due to a 22.7% decrease in edible oil prices over the past year. However, the list of price increases includes:
- Fresh vegetables, up 25.2%
- Fresh fruits, up 20.4%
- Lamb, up 19.0%
- Fresh fish, up 10.5%
Inflation Structure
The 5.4% inflation rate breaks down as follows:
- Zero contribution from controlled food products
- 1.8% contribution from free food products
- 3.3% contribution from free non-food products
- 0.3% contribution from controlled non-food products
The underlying inflation rate (excluding food and energy) remains stable at 5.5%. Prices of free products (non-controlled) have increased by 6.5% over the past year, while prices of controlled products have risen by 1.5%. The importance of the compensation policy is evident from these statistics, as otherwise, inflation would have approached double digits.
