Saudi Arabia: Consumer prices decline further in February

Consumer prices fell 0.2% over the previous month in February, following January’s 0.3% decline. The drop was mainly due to lower prices for fresh vegetables as well as for housing, water, electricity, gas and other fuels.

In February, consumer prices fell 2.2% in annual terms, the sharpest decline since April 1999. February’s print followed the 1.2% decrease in January. Meanwhile, the annual average variation in consumer prices declined from January’s 2.0% to 1.6% in February.

Along with the complete absorption of the VAT in January 2018, subdued inflationary pressures at the start of the year reflect weak domestic demand and declining rental prices.

Saudi Arabia Inflation Forecast

FocusEconomics Consensus Forecast participants expect inflation to average 1.5% in 2019, which is unchanged from last month’s projection. The panel sees inflation averaging 2.0% in 2020.