Saudi Inflation Falls to 3.5%

Annual inflation in Saudi Arabia fell to 3.5% in October from 4.4% in September, official data showed. The kingdom's cost of living index was 124.3 points in October up from 120.1 points a year earlier, the data published by the official statistics authority showed. On the month, inflation was 0.65% in October. "Although inflation has come down on an absolute basis, month-on-month it still remains high and it could very well average above 5% for the year," said John Sfakianakis, Chief Economist at Banque Saudi Fransi.

"A slight increase in food prices and high rental costs, as well as dollar weakness, will contribute to inflation remaining historically high." The Saudi central bank said earlier this month it kept interest rates unchanged in the third quarter, viewing a further rate cut as unlikely to spur lending while a rate hike was unnecessary given tepid inflation. The Saudi Arabian Monetary Agency held its main rate at 2% in the third quarter because of declining inflation and a need to support lending in a sector hit by debt restructuring concerns in family firms.- Business 24/7