The cost of living index for the largest Arab economy rose to 115.5 points on June 30 from 115 points in May, the Saudi Press Agency cited a report by the Ministry of Economy and Planning’s Central Department of Statistics.

“We could be reaching some kind of plateau within three months but we don’t see a rampant inflation that is out of control,” said John Sfakianakis, chief economist at SABB bank, HSBC’s subsidiary in Saudi Arabia.

Inflation is a key challenge across the Gulf Arab region, where currencies are pegged to the ailing dollar, as their economies surge on windfall revenues from oil that has been racing to record highs.

The index was 104.4 points on June 30, 2007, according to data of the department.

Food and beverage costs advanced 15.8 per cent in June compared with an increase of 15.1 per cent in May while the rental index – which includes rents, fuel and water – soared 18.7 per cent versus 18.5 per cent in May.

Monthly inflation in Saudi Arabia added 0.5 points in June compared to May when it reached an annual 10.4 per cent. It hit 10.5 per cent in April, its highest level in more than 30 years.

In May, it dropped 0.2 per cent month on month after adding 0.9 per cent month on month in April. “Compared to the first quarter, monthly inflation has not been growing as fast as in the second-quarter,” Sfakianakis said.

Saudi Arabia’s annual inflation may hit its peak towards the end of the third quarter which coincides with the end of Ramadan, which sees a surge in both consumption and prices, he said.

While food prices should continue to rise, the summer lull may ease the rise of the rental index compenent, Sfakianakis said. “This does not necessarily mean that it will decline, since business activity slows down in summer before picking up afterwards,” he said.

Saudi Arabia is the world’s largest oil exporter and the region’s most populous nation.

The country has dismissed changing its foreign exchange regime and has instead raised public sector wages, sought to control money supply’s growth while boosting subsidies for food and public services and curbing public spending.

Dollar pegs force the Gulf Arab states, bar Kuwait, to track the US in cutting interest rates.

With the dollar tumbling this year to record lows against the euro and a basket of major currencies, some imports have become expensive.

Laporan serupa dapat disimak di:
http://www.arabianbusiness.com/516310-saudi-inflation-risks-topping-10-in-march

pratolo.com
Wa alaykumussalam Bung NZ, masukan anda bagus sekali dan sangat penting utk pengetahuan kita (Indonesia) dlm memahami inflasi.
Polemik di US hanya bisa terjadi karena pemahaman dan kepedulian mereka terhadap ekonomi dan finance yg sangat dalam. Polemik serupa tidak mengemuka di sini karena masyarakat kita belum ‘melek inflasi’.
Kedua kubu memiliki argumen yg kuat.
Greenspan, bagaimanapun kritik terhadapnya, adalah ekonom yg sangat kompeten dan telah membuktikan bahwa asumsi inflasi yg dianutnya ini berhasil menumbuhkan ekonomi US selama 120 bulan, pertumbuhan ekonomi terpanjang dlm sejarah USA menurut NBER (Biro Independen Peneliti Ekonomi USA). Bersama Greenspan adalah BLS (Bureau of Labor Statistics) dan ekonom pemerintahan lainnya.

Di kubu lain, John Williams tidak sendirian, pendukung ‘asumsi inflasi konservatif’ antara lain:
- Stephen Roach, Chief Economist Morgan Stanley selama 16 tahun. Morgan Stanley adalah satu-satunya bank investasi besar yg berhasil selamat dr subprime mortgage. Bagi pembaca yg tertarik megikuti beberapa artikel Stephen Roach yg menarik (New York Times, Newsweek, Washington Post) dapat meng-Google.
- James Grant, editor of Grant’s Interest Rate Observer dan pengarang buku “Mr. Market Miscalculates: The Bubble Years and Beyond.”
- Bill Gross, CEO Pacific Investment Management Company, pers menjulukinya ‘Raja Obligasi Amerika’
- Peter Bernstein, penulis buku ‘Against the Gods’ (buku wajib Risk Management)
Saya sendiri, sebagai investor, menganut asumsi inflasi konservatif, yakni asumsi inflasi USA pra-Clinton, dan yg saat ini masih digunakan di Indonesia. Ingat ‘margin of safety’ Benjamin Graham.

Terimakasih Bung NZ. Saya senang menanti kritik anda berikutnya dlm artikel saya yg lain