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Saudi June inflation up slightly to 2.3 percent

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Saudi Arabia’s consumer price index climbed 2.3 percent in June, inching back up to a pace reached in April, as prices were again pushed higher mainly by rising food costs, government data showed on Thursday.

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Food and beverage prices rose 4.4 percent, and transport was up 2.5 percent, Saudi Arabia’s General Authority for Statistics said in a statement.

“Looking ahead, we think the headline rate will pick up in July and August to around 2.6 percent y/y,” said James Swanston of Capital Economics.

The impact of the war in Ukraine will keep food inflation elevated, though non-food price pressures will remain more muted, he said.

“The upshot is that inflation in the Kingdom will not increase to levels seen elsewhere in the world. Beyond August, we think the headline rate should slow to around 1.5-2.0 percent y/y over the rest of this year and through 2023,” Swanston added.

He said transport prices rose at their slowest pace in two years, helped by a cap on fuel prices the government put in place last summer when oil breached $70 a barrel.

Consumer prices rose 0.2 percent in June compared to the previous month.

In May, inflation was at 2.2 percent on a yearly basis and 0.1 percent on a monthly basis.

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