Saudi Arabia: Drop in consumer prices deepens in April
May 16, 2017
In April, consumer prices rose 0.1% compared to the previous month, which contrasted March’s 0.2% decrease. The result was mainly driven by increases in prices for clothing and footwear, and food and beverages, which offset decreasing prices in restaurants and hotels.
On an annual basis, consumer prices fell 0.6% in April, more than the 0.4% decrease in March. April’s result was the largest drop since December 2001. Meanwhile, annual average inflation fell from 2.3% in March to 1.9% in April, hitting an over 10-year low.
Although inflation is expected to return in the coming months on the back of proposed cuts to oil production and planned hikes in administered prices, weak domestic demand and a strong currency will keep the increase in prices subdued.
Author: Jan Lammersen, Economist