Riyadh based bank lowered its forecast for the average inflation rate to 4.7% from 5.1% next year
Inflation in Saudi Arabia will slow next year as increases in rents and home furniture prices ease in the Arab world’s biggest economy, Banque Saudi Fransi said.
The Riyadh based bank lowered its forecast for the average inflation rate next year to 4.7 percent from 5.1 percent, according to a report emailed yesterday. Banque Saudi Fransi maintained its inflation forecast of 5.3 percent for this year, up from 5.1 percent in 2009.
Inflation the world’s largest oil supplier accelerated to 6.1 percent in August before easing to 5.8 percent in October. The increase was due to higher global food prices, not excessive money supply, central bank Governor Muhammad al Jasser said last month.
“Although rents are poised to continue climbing month on month, the rate of annual increase is set to decline, thus removing a great deal of the burden on the annual inflation rate,” John Sfakianakis, Banque Saudi Fransi’s chief economist, wrote in the report. “We are also anticipating a slowdown in home furniture inflation, and in other expenses and services.”