Apr 11 2012 |
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Saudi Arabia's inflation steadies at 5.4 percent in March
JEDDAH - Saudi Arabia's annual rate of inflation held steady at 5.4 percent in March compared with February, a sign that the higher food and rent prices could be inflationary, data from the Central Department of Statistics and Information showed Tuesday.Rent, fuel and housing related services saw a 8.9 percent rise in March from a year earlier, compared with a 9.3 percent jump in February. Meanwhile, food and beverage prices gained 5.1 percent on year versus a 4.3 percent rise in the previous month, the CDSI said on its website.
On the month, rent, fuel and housing related services inched up 0.5 percent, food and beverage prices gained 0.7 percent from February. The cost-of-living index in the Kingdom stood at 139.9 points last month, up 0.3 percent from 139.5 in February.
The Saudi Arabian Monetary Agency (SAMA) has 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 to remain higher than its historic average of 1 percent. Inflation in the Kingdom is expected to moderate to an annual average of 4.4 percent in 2012, Jadwa Investment said in a recent note.
Saudi rents and property prices are rising amid housing shortage, which could push the Kingdom's annualized inflation rate as high as 7 percent later this year, up from 5.2 percent in 2011, they said.
SAMA data in February showed that the Kingdom will see a relative stability or a slight decline in domestic inflationary pressures, especially in the group of food and beverages and the group of goods and other services during the first quarter of 2012. Spending programs announced last year would cost at least SR485 billion.
SAMA is forecast to hold its overnight reverse repo rate at 0.25 percent this month, and the benchmark repurchase rate at 2 percent, analysts said.
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