Saudi Arabia's annual inflation eased to 4.8 percent in August and monthly price growth halved to 0.5 percent as a rise in housing and transport cost subsided, data showed Wednesday. Inflation in the Kingdom has been floating below 5 percent for most of 2011. It stood at 4.9 percent on an annual basis and 1.2 percent month-on-month in July. “The overall headline number is not as high as we expected it to be because of Ramadan,” said Khan Zahid, chief economist at Riyad Capital. “A number of factors may explain this. Slowing global inflation, fall in oil prices which leads to a drop in transport prices and voluntary restraint by retailers and wholesalers on food prices,” he said. Food costs, which account for a quarter of Saudi consumer expenses, soared 1.5 percent on a monthly basis in August, keeping their growth pace from the previous month, the data from the Central Department of Statistics showed. Food prices usually surge during Ramadan as families enjoy more elaborate evening meals after they break their fast at sunset. Housing price growth slowed to 0.7 percent month-on-month from 1.6 percent in July, while transport costs were flat in August after a 0.7 percent increase in the previous month, the data showed. Meanwhile, the Saudi Arabian Monetary Agency is not looking into buying euro debt, its Governor Muhammad Al-Jasser said Wednesday. Asked if Saudi Arabia was worried about the US debt and was considering purchasing euro zone sovereign debt, Jasser said: “No.”
