The cost of living rose 2.2% year on year in August in Saudi Arabia, new figures suggest.
That was exactly the same figure reported in July and suggests that inflation may be slowing after a big jump at the start of 2018.
In the first quarter of the year, covering January-March, inflation was 2.8% year on year following the imposition of value added tax (VAT) at 5% in January.
In August, restaurant and hotel prices saw the biggest jump of any product category, rising 8.4% year on year. Food & beverages, a large part of most household budgets, rose 6.6% year-on-year, compared to 6.7% in July.
Whether or not inflation will start increasing again more rapidly remains to be seen. Jadwa Investment has previously predicted a full-year inflation rate of 3.1%, “due to higher imported inflation, and higher costs borne by local food and agriculture companies”.
Capital Economics echoed that sentiment in a research note. “We still expect it to rise a little over the rest of this year as underlying price pressures pick up,” said Jason Tuvey, senior emerging markets economist at the research company.
January, however, may bring good news. By then, with VAT having been around a year and its impact no longer reflected in the figures, the cost of living may even fall year-on-year, Tuvey said.