Dubai (Reuters) – Saudi Arabia’s annual inflation rate eased for a second consecutive month to 2.3% in July from 2.7% in June, government data showed on Tuesday, its slowest in over a year.
The rise in prices was mainly driven by an 8.6% jump for housing, water, electricity, gas and other fuels and a 1.4% increase in food and beverages, the General Authority for Statistics said.
“Looking ahead, we think that the headline inflation rate will continue to ease over the remainder of this year to 1.0-1.5% y/y and will hover around this rate well into 2024,” James Swanston, Middle East and North Africa economist at Capital Economics, wrote in a research note.
The July headline rate – the slowest since June last year -was below Capital Economics’ forecast of 3.1% and a median expectation of 2.4% in a Reuters poll.
Prices of housing, water, electricity, gas and other fuels were up 0.3% from June, when it notched a 9.1% annual rise. Food and beverage prices were 0.4% higher compared to June.
Prices for clothing and footwear dropped 3.9% in July from a year earlier, easing 0.8% from June. Furnishings, household equipment and maintenance fell 2.5% year-on-year and 0.3% from June.
Inflation in Saudi Arabia has been on a downward trend since starting the year at a rate of 3.4% in January.
