Saudi inflation eases

JEDDAH: Saudi annual inflation eased to 4.9 per cent in June, its lowest level since last September, despite a big rise in housing prices, official data showed yesterday.

Inflation slowed from 5.1pc in May. The month-on-month rate in June was unchanged from 0.2pc in May, according to the Central Department of Statistics.

“I think it is probably lower commodity prices globally and a reflection of a strong dollar and a weaker euro, because about 28pc of Saudi imports are from Europe and that makes a difference,” said James Reeve, senior economist at Samba Financial Group.

Prices of housing, rents and water jumped 8.8pc from a year earlier in June.

Saudi suffers a housing shortage that drives up real estate prices. Last year the government promised to build half a million homes and last week passed a mortgage law to stimulate house building, but analysts believe high land prices may prevent any quick resolution to the problem.

Other price categories were relatively subdued; food prices, which account for 26pc of consumer expenses, climbed 4.7pc in June and clothing gained 2.9pc.

@ gulf daily news, July 11, 2012