Saudi inflation set to dip this year
Saudi Arabia’s inflation this year is expected to reach 4.3 percent year-on-year down from 4.5 percent in 2012, say economic analysts.
“For 2013, we expect inflation to be mainly driven by rent and housing related services as well as food prices,” Fahad Alturki, senior economist at Jadwa Investment, said.
Jadwa said that rent and housing-related services maintained their gradual downward trend last month to 6.3 percent year-on-year, compared with 6.5 percent in the previous month.
Tamer El Zayat, senior economist at the NCB, said: “Inflation is likely to remain subdued, registering a similar 4.5 percent in 2013, largely driven by relatively weaker imported inflation.” El Zayat said he believed that the foodstuff category will remain range-bound around 4-5 percent Y/Y for 2013. He added: “Additionally, codifying the approved mortgage law is expected to contain rental inflation below 8 percent.
Nevertheless, the robust growth in consumer loans will constitute an upside risk to headline inflation. SAMA is vigilant and although monetary policy is in autopilot mode, any excess liquidity or a breach of the 5 percent inflation rate will force the monetary authority to mop liquidity via the issuance of treasury bills.” The Central Department for Statistics and Information released recently CPI data for December showing inflation remained at the 3.9 percent year-on-year level observed in the previous month.
The Jadwa report said monthly inflation slightly slowed to 0.2 percent in December compared with 0.3 percent in November. Fabrics and clothing posted the highest increase, 0.7 percent, but this has a relatively small weight in the CPI basket. Monthly rental inflation slightly increased to 0.4 percent compared with 0.3 percent in November. Food monthly inflation, however, decelerated to 0.2 percent in December from 0.7 percent the previous month; in line with trend of the international food prices.
- Presidential vacuum, Syrian crisis leaves Lebanon's business leaders more than worried
- Oil wells, taxes, and scare tactics: how the IS has been making money all this time
- Business marries politics, again: are Erdogan-allied businesses getting away with more?
- Time to invest closer to home? Why the GCC countries are urged to pump their money into an Arab 'Marshal Plan'
- (Re)-Starting Up: Tunisia 'ripe' for post-Arab Spring economic recovery