FINANCIAL NEWS

Inflation of Saudi Arabia will remain steady

18 Aug 2013

(MENAFN) Saudi Arabia’s inflation is expected to remain steady in the following years between 3.5 percent and 4.0 percent, according to Gulf News.

The kingdom has no worries that the price pressure will become a major concern because of the inflation that has calmed down this year, as core inflation stood at 2.0 percent in July down from 3.1 percent in the beginning of this year, Capital Economics stated.

“After all, the banks are in a healthy condition and the government’s fiscal position is strong enough that it can respond to any sharp deterioration in the economy by ramping up spending. As such, we’re projecting growth of around 3.5 per cent a year over the coming years. This would imply that core inflation pressures are unlikely to build up. At the same time, we don’t expect commodity prices to rise, so non-core inflation is unlikely to accelerate further – in fact, we think it is likely to fall,” Emerging Markets Economist at Capital Economics, William Jackson, said.

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