The inflation rate rose to 5.3 percent, the Saudi Press Agency reported, compared with 4.8 percent in the previous month. The cost of living index increased 0.9 percent in September from August, the report said. Annual inflation in January was also 5.3 percent.
Saudi Arabia, the Arab world’s biggest economy, announced earlier this year about $ 130 billion in spending to create jobs for its nationals. The government had already pledged a $ 384 billion, five-year development plan to build new houses and expand non-oil industries.
“We’ve expected this now given higher oil prices as well as the government stimulus package and overall recovery and growth in the economy,” said Liz Martins, a senior economist with HSBC Bank Middle East Ltd. She said the inflation rate is not expected to climb much higher so long as the US dollar continues its recovery.
The Saudi riyal is pegged to the US dollar at a rate of 3.75 riyals.
Muhammad Al-Jasser, Governor of the Saudi Arabian Monetary Agency (SAMA) cut his forecast for economic growth this year to 5 percent and said the inflation rate had begun to stabilize, media reports said at the end of last month. The bank’s earlier forecast was for a 6 percent expansion. SAMA said in August that inflation may accelerate during the third quarter on higher consumer spending.
