20/12/2010
Saudi inflation unchanged
Saudi Arabia's annual inflation remained unchanged from the previous month at 5.8 percent in November, underpinned by rising housing and transport costs in the biggest Arab economy.
The global crisis has reduced inflation across the Gulf Arab region from record highs in 2008. Price pressures have been rising again in some countries but inflation is expected to stay in low single digits for now.
Analysts polled by Reuters expected average Saudi inflation of 5.3 percent this year and 5.1 percent in 2011, still well below a record high of 11.1 percent in July 2008.
Monthly inflation in the world's top oil exporter stood at 0.3 percent in November, down from 0.5 percent in the previous month, state news agency SPA said late on Saturday.
"Goods, services and housing are the contributing factors to inflationary pressures for the month of November ... but going forward there should be a bit of a decline," said John Sfakianakis, chief economist at Banque Saudi Fransi.
Housing costs rose 0.5 percent month-on-month, compared to a 0.6 percent increase in October.
Food prices, which have the largest weighting of 26 percent in the consumer price basket, rose 0.3 percent month-on-month in November, down from a 1.6 percent rise in the previous month.Inflation in Saudi Arabia had been on the decline since reaching an 18-month high of 6.1 percent in August. The central bank has said it is not yet a concern.
But some economists such as Monica Malik, chief economist at EFG Hermes in Dubai, expect inflation to accelerate in 2011.
"For 2011, a small acceleration to 5.8. The two main drivers of inflation will be food prices, especially in the first half, and rental prices," Malik said.
Saudi Arabia's economy is seen expanding by at least 3.5 percent this year, mainly helped by more stable oil prices, central bank Gov. Muhammad Al-Jasser said in September.
