Saudi Arabia is expecting a higher inflation rate in the third quarter of the financial year, economic analyst report. Saudi Central Bank has also expressed its expectation of a moderate rate of inflationary pressure in the Kingdom.
According to an opinion poll conducted by Reuters in July, Saudi will experience a 5.9 percent inflation rate in 2011. Annual inflation in the Kingdom edged up to 4.9 percent in July, from 4.7 percent in June, due to rising prices of food, products and services, while monthly inflation was the highest since early 2008, economic data showed this week.
Some analysts expect that inflation in the third quarter will grow at a higher rate than the Central Bank’s forecasts due to increased spending during the summer period and Ramadan.
“There is an agreement that inflation will rise but the difference is in how strong this rise will be,” said Abdulhamid al-Amri, a member of the Saudi Economic Association think tank.
“There is always a higher rise in the second-half of the year because of the seasonality and because of Ramadan. I believe the rise will be higher than the ‘moderate’ pace predicted,” he added.