Annual inflation in Saudi Arabia fell to 7.9 percent in January from 9 percent in December, official data showed. The Saudi cost of living index rose to 120.5 points on Jan. 31 compared with 111.7 points on the same day a year earlier, the Kingdom's Central Department of Statistics said on its website. Rents rose 20.3 percent while food and beverage costs climbed 8 percent, the data showed. A surge in food prices and rents threw Saudi Arabia into the throes of inflation after basking in relative stability for more than 20 years, prompting calls for currency revaluation and other measures. Official figures showed inflation in the world's oil powerhouse hit a record 4.1% in 2007 mainly because of a surge in rents as well as the prices of food, beverages, fuel, water and other goods and services. It was the highest inflation rate to hit the Kingdom since the end of the first oil boom in early 1980s, although it remains far lower than inflation levels in other neighbouring oil producers, mainly Qatar and the UAE. Figures by the Saudi Arabian Monetary Agency showed there was a sharp rise in rents, food and beverage prices and other products in 2007. Its cost of living index showed the prices of foodstuffs and beverages jumped seven per cent last year, while the prices of other goods and services soared by 5.3%. Rents, house renovations, fuel and water prices shot up by 8.1% and medical care by 4.9%. In contrast, the price of clothes and footwear declined by around one per cent, while home furniture, transport and telecommunications, recreation and education services remained almost unchanged. Inflation was estimated at around 2.2% in 2006 and only 0.7% in 2005. It was almost flat in the previous three years, while it ranged between negative rate to one per cent in the previous two decades. Sama's figures showed inflation in 2007 picked up in the second half of the year, surging by nearly 5.9% between June and December, after recording negative growth in some months in the first half.
