Tuesday, December 25, 2007

Saudi inflation at a 12 year high

Inflation in Saudi is on the rise.

DUBAI: Inflation in three Saudi Arabian cities, including the capital Riyadh, rose to more than five per cent in the third quarter, accelerating at a faster pace than the country average, the central bank said yesterday.

Price rises in Riyadh grew 5.9pc in the three months ended on September 30, while inflation hit 5.2pc in Najran and 6.1pc in Ha'il, the fastest pace in the oil producer's 16 cities, the Saudi Arabian Monetary Agency said on its website.

Inflation averaged of 4.4pc in the largest Arab economy in the third quarter, the central bank said. The dollar's weakness this year helped drive up food and beverage costs 6.5pc in the third quarter, while rents jumped 9.5pc in the period, the data showed.

"The change in the prices of imported goods is an important factor affecting the level of domestic inflation," the central bank said. Saudi Arabia's King Abdullah has ordered subsidies on imported rice and baby milk to cushion consumers from rising inflation, according to a decree published this month. Inflation in Saudi Arabia hit 5.35pc in October, its highest since 1995. Average inflation in the country could rise to 4.1pc next year from 3.8pc this year, a Reuters poll showed.