Annual inflation in the world's top oil exporter Saudi Arabia rose to 10.5 per cent in April, its highest level in at least 27 years, fuelled mainly by rents and food prices.
Inflation is a challenge across the Gulf Arab region, where governments which peg their currencies to the ailing US dollar are raising wages and subsidies, bringing in price controls and tightening lending curbs to dampen the impact of price rises.
In Saudi Arabia, the cost of living index rose to 115.2 points in April from 104.3 points a year earlier, the economy and planning ministry's statistics unit said on Saturday.
The index however clocked its weakest monthly rise this year, adding 0.9 per cent from March. Annual inflation, as measured by the index, was 9.6 per cent in March.
'Inflation is not on an abating pattern despite a decline in money supply growth. It has more to do with rents and food than with money supply,' said John Sfakianakis, chief economist at SABB bank, HSBC's affiliate in Saudi Arabia.
April rents soared 20.4 per cent from a year ago, while food and beverages costs added 16 per cent, according to the data.
'Rents inflationary pressures are continuing to rise. It is an issue that has to be addressed in terms of both supply and demand for housing and commercial space and of the real estate speculation,' Mr Sfakianakis added.
Food prices account for about 26 per cent of the cost of living index while rents account for 18 per cent of the index.
Price rises are plaguing the world's biggest oil-exporting region, where economies are surging on a near sevenfold increase in oil prices during the last six years.
Inflation is a challenge across the Gulf Arab region, where governments which peg their currencies to the ailing US dollar are raising wages and subsidies, bringing in price controls and tightening lending curbs to dampen the impact of price rises.
In Saudi Arabia, the cost of living index rose to 115.2 points in April from 104.3 points a year earlier, the economy and planning ministry's statistics unit said on Saturday.
The index however clocked its weakest monthly rise this year, adding 0.9 per cent from March. Annual inflation, as measured by the index, was 9.6 per cent in March.
'Inflation is not on an abating pattern despite a decline in money supply growth. It has more to do with rents and food than with money supply,' said John Sfakianakis, chief economist at SABB bank, HSBC's affiliate in Saudi Arabia.
April rents soared 20.4 per cent from a year ago, while food and beverages costs added 16 per cent, according to the data.
'Rents inflationary pressures are continuing to rise. It is an issue that has to be addressed in terms of both supply and demand for housing and commercial space and of the real estate speculation,' Mr Sfakianakis added.
Food prices account for about 26 per cent of the cost of living index while rents account for 18 per cent of the index.
Price rises are plaguing the world's biggest oil-exporting region, where economies are surging on a near sevenfold increase in oil prices during the last six years.
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