Saudi Inflation Accelerates 10.9% in August on Rent

By Glen Carey

Sept. 21 (Bloomberg) -- Saudi Arabian inflation accelerated 10.9 percent in August as the cost of rent, water and fuel continued to hover near record levels, the Saudi Press Agency reported, citing the Central Department for Statistics.

Inflation in Saudi has soared since the middle of 2007 when it was at about 3 percent, and has surpassed 10 percent in each of the last three months, though it has eased since reaching a record of 11.1 percent in July.

Inflationary pressures in the kingdom will remain strong as government and private spending increases, exacerbated by the holy month of Ramadan in September, the Saudi Arabian Monetary Agency said in a quarterly inflation report published on its Web site on Sept. 6.

Inflation exceeded 10 percent in five of the six Gulf Cooperation Council states, including Qatar, as oil-fueled economic growth created shortages of housing and services. Crude oil closed last week at $104.55 a barrel on the New York Mercantile Exchange, down 29 percent since touching $147.27 a barrel on July 11, the highest since trading began in 1983.

The cost of rent, fuel and water for August in Saudi Arabia increased 18.5 percent, the Saudi Press Agency reported, citing the Central Department for Statistics. The GCC is an economic and political block of Saudi Arabia, the United Arab Emirates, Kuwait, Qatar, Oman and Bahrain, which together pump almost 20 percent of the world's oil.

To contact the reporter on this story: Glen Carey in Dubai at gcarey8@bloomberg.net.