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Saudi Arabian Inflation Slows to 6.9 Per Cent

DUBAI — Saudi Arabian inflation slowed to the weakest in a year in February as declining demand drove rent, food and service prices lower.

Consumer prices rose 6.9 per cent from a year earlier after climbing 7.9 per cent in January, the country’s statistics office said on its Web site 
on Wednesday.

Inflation across the Gulf Co-operation Council has eased from records in five of the six member countries since oil prices plunged from a record $147.27 a barrel in July. Saudi Arabian inflation may slow to 6.2 per cent this year, according to the Riyadh-based Samba Financial Group.

“Rents, food and general services in the economy are falling due to a decline in domestic demand, global deflation, a stronger dollar,” John Sfakianakis, chief economist at Saudi British Bank, said in an e-mail.

The world’s largest oil exporter plans to spend $400 billion on infrastructure projects in the next five years to spur growth during the global 
financial crisis.

The economy will expand 1.6 per cent this year, according to the median estimate of eight economists surveyed by Bloomberg News.

“Food prices should see an even bigger drop in the coming months as food importers are now stockpiling inventory at a lower marginal price,” 
Riyadh-based Sfakianakis said.