Saudi Arabia Inflation June 2017

Saudi Arabia

Saudi Arabia: Decline in consumer prices eases in June

July 19, 2017

Consumer prices rose 0.7% in June compared to the previous month (May: -0.2% month-on-month). The rise reflected much higher prices for tobacco as a result of the government’s decision to hike prices for tobacco and its derivatives. Higher prices for restaurants and hotels, and food and beverages also contributed to the monthly increase.

On an annual basis, prices fell for the sixth consecutive month in June, albeit at a softer pace. Consumer prices declined 0.4% in June, up from May’s 2.2% decrease. Meanwhile, annual average variation in consumer prices fell from 1.4% in May to 1.1% in June.

Inflation will gradually resurface in the coming months on the back of planned hikes in administered prices. Weak domestic demand and a strong currency, however, will keep inflation subdued.

FocusEconomics Consensus Forecast participants expect inflation to average 1.7% in 2017, which is unchanged from last month’s projection. For 2018, the panel sees inflation averaging 3.6%.

Author: Ricard Torné, Lead Economist

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Saudi Arabia Inflation Chart

Saudi Arabia Inflation June 2017 0

Note: Year-on-year and month-on-month variation of consumer price index in %.
Source: Central Department of Statistics & Information (CDSI).

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