Saudi annual inflation up to 5.5% last month
Due to the high housing costs
Official statistics showed the annual inflation increase in Saudi Arabia was up to 5.5 percent in June, the highest level reached by the largest oil exporter country in the world over at least a year from 5.4 percent of May.
The Central Department of Statistics & Information has mentioned on its website that the monthly increase in prices reached 0.3 percent.
The high prices pressure is noticed again this year with the recovery of the economies of oil exporting countries, but is expected to remain within single-digit inflation across the Gulf, the largest oil exporter in the world.
The annual inflation started rising again in Saudi Arabia after the slow performance down to its lowest level in two and a half years after scoring 3.5 percent in October, before rising to 5.4 percent in May.
Furthermore; the housing costs, which forms 18 percent of the living index cost up to 0.9 percent on a monthly basis in June and 9.2 percent on an annual basis.
As for food prices, which has the heaviest load on the index at 26 percent, rose 0.6 percent on a monthly basis in June.
The Saudi Arabian Monetary Agency declared that the inflation stability is expected in the second quarter of this year and will remain driven by high prices of housing and food.
Mohammed Al-Jasser; SAMA Governor explained that the monetary policy is not the appropriate solution to deal with supply fright.
The Bank has limited tools to rein the inflation by tying the Saudi riyal to the U.S. dollar.
The Kingdom has launched a plan of five-year development worth 400 billion dollars in 2008 G-20 countries.
Some Analysts expect mentiobed by Reuters that the inflation rate will reach 4.7 percent as for 2010.