Inflation in Saudi Arabia has accelerated to 4.2 percent year-on-year in January this year, the highest level since July 2012, compared with 3.9 percent the previous month, according to the latest report by the Central Department for Statistics and Information (CDSI).
Riyadh-based Jadwa Investment said this rise is mostly due to higher food and other expenses and services prices which both contributed 2.3 percentage point to the overall inflation figure, while the contribution of rent and housing related services inflation fell to 1.2 percentage point in January compared with 1.5 percentage point in the previous month.
Food prices maintained their upward trend since September last year. In January, food prices increased by 6 percent year-on-year, the highest level since April 2011. Most of this increase is due to risings prices of meat and poultry, fish and crustaceans and fresh fruits. Prices of cereal and cereal products, however, maintained their deflationary trend, contracting by 0.3 percent year-on-year despite some reports of grain and flour shortage in some areas of the Kingdom. In fact, the General Organization for Grain Silos and Flour Mills has announced that it raised the flour allocation to licensed distributors by 10 percent earlier this month. International food prices also point to a minimal external pressure. According to the Food and Agriculture Organization (FAO), international food prices contracted by 1.4 percent year-on-year in January compared with -0.4 in December, the report said.