Editor’s Note:
The Saudi Central Department of Statistics provides the government’s report of inflation rates every month. This week Jadwa Investment released its monthly “Inflation Report” for January 2013 which noted “inflation in the Kingdom has accelerated to 4.2 percent year-on-year in January this year, the highest level since July 2012.”
We thank Jadwa Investments for sharing it here. For comments and queries please contact the author: Fahad Alturki, Senior Economist
[Complete report with very helpful charts, graphs and tables at this link. [English][Arabic]]
Inflation Update – January 2013
January inflation trending upward
According to the latest report by the Central Department for Statistics and Information (CDSI), inflation in the Kingdom has accelerated to4.2 percent year-on-year in January this year, the highest level since July 2012, compared with 3.9 percent the previous month. The rise is mostly due to higher food and other expenses and services prices which both contributed 2.3 percentage point (ppt) to the overall inflation figure, while the contribution of rent and housing related services inflation fell to 1.2ppt in January compared with 1.5ppt in the previous month. Our measure of core inflation* has also accelerated to 2.7 percent in January compared with 2.1 percent in December.
Food prices maintained their upward trend since September last year. In January, food prices increased by 6 percent year-on-year, the highest level since April 2011. Most of this increase is due to risings prices of meat and poultry, fish and crustaceans and fresh fruits. Prices of cereal and cereal products, however, maintained their deflationary trend, contracting by 0.3 percent year-on-year despite some reports of grain and flour shortage in some areas of the Kingdom. In fact, the General Organization for Grain Silos and Flour Mills have announced that it raised the flour allocation to licensed distributors by 10 percent earlier this month. International food prices also point to a minimal external pressure. According to the Food and Agriculture Organization (FAO), international food
prices contracted by 1.4 percent year-on-year in January compared with –0.4 in December.
Rent and housing related services inflation decelerated to 5.1 percent year-on-year, the lowest level since April 2007. While we had anticipated a gradual decline in this category due to additional housing units entering the market, a larger base effect has also played a role in this accelerated decline. The month-on-month change (0.5 percent) is consistent with last year trend, though it was slightly higher than December level (0.4 percent).
Monthly inflation slightly increased to 0.3 percent in January compared with 0.2 percent in December. Transport and telecommunication posted the highest increase, 0.6 percent which mostly due to a 1.5 percent month-on-month increase in public transport fees. This along with a 0.4 percent rise in the prices of other goods and services pushed the monthly core inflation upward to 0.3 percent compared with 0.1 percent in December. Monthly food inflation remained at the December level of 0.2 percent.
[Complete report with very helpful charts, graphs and tables at this link. [English][Arabic]]
For comments and queries please contact the author: Fahad Alturki, Senior Economist (falturki@jadwa.com).
Head Office:
Phone +966 1 279 1111
Fax +966 1 279 1571
P.O. Box 60677, Riyadh 11555
Kingdom of Saudi Arabia
www.jadwa.com
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