Saudi inflation mounts in March
Saudi inflation inches to nine-month high of 4.7 percent in March, led by home rents, fuel, and food costs.
April 15, 2010 9:26 by Katherine Azmeh
Annual inflation in Saudi Arabia inched up to 4.7 percent in March, driven by food costs, official data showed, and an analyst said prices should continue to rise at around the same rate in coming months.
Month-to-month inflation in the world’s largest oil exporter as measured by the cost of living index rose 0.5 percent to 126.7 points, official news agency SPA said, quoting the country’s statistics department.
Annual inflation was 4.6 percent in February.
The global crisis has reduced inflation across the Gulf Arab region from record highs in 2008. Price pressures are seen rising again as key economies in the oil-exporting region recover but inflation is expected to stay in the low single digits this year across the Gulf.
“Inflation is slowly picking up. Economic activity is picking up. The usual culprits, food and rents, are driving inflation. In the next months there could be a fluctuation in a range of 4.4-4.7 percent,” said John Sfakianakis, chief economist at Banque Saudi Fransi.
The annual increase in the food and drinks price index was 5 percent in March, up from 4 percent the previous month, while it eased for the renovation, home rents, water and fuel index to 10.1 percent from a 10.6 percent annual rise in February.
The food and drinks index accounts for a 26 percent weighting in the cost of living index.