Of the 12 major price categories, inflation picked up in seven, was unchanged in one and eased in four.
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Jason Tuvey, senior emerging markets economist, Capital Economics, said: “This appears to reflect the recent bottoming out in the property market, which is feeding through into rents declining at a slower pace.”
Food inflation, which accounts for a further 20 percent of the CPI, was unchanged between December and January at 2.2 percent year-on-year.
Clothing and furniture inflation eased, while overall, non-food inflation rose from 0.3 percent (yoy) in December to 0 percent yoy last month.
“The strengthening of price pressures appears to reflect the pick-up in growth in the non-oil sector over the past few quarters,” said Tuvey.
Prices receded in Saudi Arabia last year after rising in 2018 on the back of the introduction of a value added tax.
But higher government spending and an easing of austerity measures have given a boost to economic activity, which has recently started to translate into positive inflation, economists have said.
Looking ahead, with fiscal policy set to tighten this year, Tuvey said he expects the non-oil sector to “lose some steam”, which will keep a lid on underlying price pressures.
“If the disruption caused by the coronavirus subsides, we expect a rebound in oil prices to prompt further hikes to fuel prices – which will now be revised on a monthly, rather than quarterly, basis – pushing up headline inflation.”
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