Saudi Arabia: Inflation comes in at highest level in a year in June
July 21, 2022
Consumer prices rose 0.23% in June over the previous month, picking up from May's 0.12% increase. Looking at the details of the release, faster price increases for food and transport were largely responsible for the acceleration.
Inflation came in at 2.3% in June, which was up from May’s 2.2%. June's figure represented the highest inflation rate since June 2021. Meanwhile, the trend pointed down mildly, with annual average inflation coming in at 1.4% in June (May: 1.6%).
Inflation should rise in H2 owing to rising commodity prices, supply bottlenecks and rising domestic demand. That said, it should remain muted compared to other countries in the Middle East due to government subsidies. In particular, the government pledged to cap petrol prices when oil prices breach USD 70 per barrel at the end of last year, limiting the pass-through from rising fuel costs on domestic inflation.