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Saudi Arabia Inflation May 2022

Saudi Arabia: Inflation recedes in May

Consumer prices increased 0.12% from the previous month in May, a smaller increase than April’s 0.43% increase. May’s result marked the lowest reading since December 2021. The moderation was largely due to softer rises in prices for transport and food and non-alcoholic beverages.

Inflation dropped to 2.2% in May, which followed April’s 2.3%. Annual average inflation fell to 1.6% in May (April: 1.9%).

Inflation should pick up in H2 due to rising commodity prices, worsening 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.

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