Inflation Forecasts Up As Food And Rent Hit New Highs

May 2008 | Economic Analysis

We have revised up our end-year inflation forecasts for Saudi Arabia to 8.0% y-o-y and 5.0% y-o-y for 2008 and 2009 respectively, on the back of reports that growth in the consumer price index (CPI) accelerated for the twelfth month in a row in April to hit 10.5% y-o-y, a 27-year high. On top of this, we note that the recent acceleration in inflation could further fuel political unrest going forward, and have therefore slightly revised down our short-term political risk rating from 70.2 to 69.6. Meanwhile inflation is continuing to accelerate across the Middle East region, with central bank

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