Saudi May inflation slows to 3.8%
Main contributor to the inflation rates was a fall in core index’s main components
Dubai: Saudi Arabia’s annual inflation rate slowed slightly to 3.8 per cent in May, the lowest this year, from 4 per cent in April due to a fall in the core index, the Kingdom’s Central Department for Statistic and Information said.
The main contributor to the overall easing of inflation rates was a fall in the core index — which excludes food and housing components — to 2.6 per cent in May from 3.4 per cent in April, the CDSI figures showed.
Meanwhile, food and beverages prices edged up to 6.4 per cent in May versus 6.2 per cent in April, while rental and housing prices rose to 3.6 per cent from 3.0 per cent, CDSI said in a statement on its website.
All of the core index’s main components — clothing and footwear, transport, and restaurants and hotels — showed a significant drop in May.
“While domestic inflationary pressure is likely to persist as we approach the holiday seasons, we see the current inflationary trend as more of a demand-pull inflation rather than a cost-push inflation caused by recent labour market reform initiatives,” Fahad Alturki, head of research at Riyadh-based Jadwa Investment, said in a note.
Saudi’s central bank and the International Monetary Fund both expect inflation in the Gulf kingdom to peak at around 4.6 per cent this year before slowing again by 2014.
