Regional economists are scratching their heads over why a combination of historically high global food prices and a multibillion-dollar spending package is not stoking inflation in Saudi Arabia as forecast.
Global food prices rose 26 per cent year-on-year in August, according to the UN Food and Agriculture association. However, in Saudi Arabia, a leading importer of foodstuffs, prices of food and beverages rose only 5.4 per cent year-on-year in the same month.
Headline inflation of a wider basket of goods and services in the kingdom slowed to 4.8 per cent year-on-year in August from 4.9 per cent a year earlier, according to the central statistics bureau, despite including the holy month of Ramadan when food prices often increase.
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