Deflation takes hold in Saudi as consumer prices drop for eighth straight month  

Decrease mainly attributed to 6.5% annual drop in housing, water, electricity, and gas prices

  
Saudis shop at the Red Sea Mall, one of the biggest malls in city on December 10, 2015 in Jeddah, Saudi Arabia. Image for illustrative purposes.

Saudis shop at the Red Sea Mall, one of the biggest malls in city on December 10, 2015 in Jeddah, Saudi Arabia. Image for illustrative purposes.

Getty Images/Jordan Pix

Saudi Arabia’s consumer price index recorded a 1.1 percent year-on-year decrease last month, pushing the kingdom into the eighth consecutive month of deflation.

While the general index edged slightly higher on a monthly basis, to 106.1 in August from 106 in July, it dropped by 1.1 percent from 107.3 in comparison to the same month last year, the latest figures released by the Saudi General Authority for Statistics showed.

The decrease in prices was mainly attributed to a 6.5 percent annual drop in the category of housing, water, electricity, and gas.

Other categories such as food and beverages recorded a slight 1 percent increase during the month of August on an annual basis. Two other categories, education and transport also witnessed a rise of 1.3 percent. The restaurants and hotels category increased by 1 percent from a year earlier.

Starting January this year, Saudi Arabia went into deflation, as the impact of taxes imposed earlier by Saudi authorities subsided.

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