Saudi Arabia's inflation just eased to its lowest rate this year

Saudi Arabia’s inflation rate eased to its lowest level this year, falling to 2.3 percent in November driven mainly by a steeper decline in food prices, official data showed.

“This seems to reflect the lagged effect of the drop in global food prices over the past couple of years.” London-based consultancy Capital Economics (CE) said in a note.

Most main groups in the consumer prices index (CPI) increased in November, compared to the same month in 2015, with the exception of hotels and restaurants, food and beverages, and entertainment and culture. Food alone accounts for 20 percent of the CPI basket, and fell by 2.6 percent year-on-year last month.

“Stripping out food prices, underlying price pressures have continued to ease,” CE said. “The effect of administered price hikes to energy and water at the start of this year has faded.”

Housing and utilities also edged down last month, data showed.

Meanwhile, tobacco and transportation groups jumped the most in November on the CPI, rising 20.5 percent and 7.7 percent, respectively.

Write to Reem Abdellatif at reem.a@argaam.com