Saudi expects inflation rate to drop in Q3

Saudi Arabian inflation will continue to decline in the third quarter partly on increased housing supply and falling food prices, the central bank said on Thursday.

The Saudi Arabian Monetary Authority (Sama) said annual inflation stood at 5.3 per cent for the year ended in the second quarter of 2009 amid a downward trend that began last year.

"In view of the current situation of the global economy, there are projections indicating a continued decline in inflation pressures in the Saudi economy," Sama said in a report.

"There is a general trend suggesting a continued decrease in the prices of construction inputs such as steel and cement, the prices of most foodstuffs and the remaining constituents of consumer price basket."