Thursday, May 10, 2012
DUBAI (Zawya Dow Jones)--Saudi Arabia's annual rate of inflation edged down to 5.3% in April from 5.4% in March, mainly due to lower food prices, data from the Central Department of Statistics and Information showed Thursday.
Rent, fuel and housing-related services rose 9.2% in April from a year earlier, compared with an 8.9% jump in March. Food and beverage prices dropped 4.3% from a year earlier, compared with a 5.1% rise in March, the CDSI said on its website.
On the month, rent, fuel and housing-related services gained 0.8% and food and beverage prices inched up 0.1%.
The cost-of-living index in the Arab world's largest economy stood at 140.2 points, up 0.2% from 139.9 in March.
Saudi Arabia, a mostly desert country with scarce water supplies, imports the bulk of its food needs.
The Saudi Arabian Monetary Agency, the country's central bank, has repeatedly said that inflationary pressures caused mainly by an increase in global food prices are worrying, but the central bank sees no need to change interest-rate policy.
Economists expect inflation in the world's top oil exporter to remain higher than its historic average of 1% as the government continues to post expansionary budgets.
Saudi rents and property prices are rising as the kingdom struggles with a housing shortage, which could push the annualized inflation rate as high as 7% later this year, up from 5.2% in 2011, they say.
Spending programs announced last year by King Abdullah, which are likely to cost the government at least 485 billion Saudi riyals ($129.3 billion) over several years, could also lead to inflationary pressure in the kingdom.
SAMA said in February that the kingdom will see relative stability or a slight decline in domestic inflationary pressures, especially in food and beverages and goods and other services, during the first quarter of 2012.
-By Summer Said, Dow Jones Newswires; +966 546 842373; summer.said@dowjones.com
(END) Dow Jones Newswires
10-05-12 1546GMT
