Saudi consumer prices fall in May y/y for fifth month in a row

Credit: REUTERS/ZOHRA BENSEMRA

Saudi Arabia's consumer prices fell in May from a year earlier for the fifth month in a row, but the consumer price index (CPI) rose marginally from April, government data showed on Wednesday.

Adds CPI components, background

DUBAI, June 19 (Reuters) - Saudi Arabia's consumer prices fell in May from a year earlier for the fifth month in a row, but the consumer price index (CPI) rose marginally from April, government data showed on Wednesday.

The CPI index fell 1.5% in May on an annual basis and was up 0.1% from April, data from the General Authority for Statistics showed.

The annual CPI decline has partly reflected the fading impact of last year's introduction of a value-added tax (VAT), economists have said.

Wednesday's data showed the sub-index for housing, water, electricity, gas and fuel prices fell 7.5 percent from a year earlier. The sub-index had fallen 7.8 percent in April.

Prices for food and drinks, however, rose 1.8 percent, higher than the pace seen in April, and prices for education rose 1.3 percent, at the same pace registered in April.

Economists still expect deflation in 2019 after prices rose throughout 2018 following the introduction of the VAT, which was imposed to boost non-oil revenue in response to a long-term drop in oil prices.

Capital Economics expect Saudi CPI to fall 1.3 percent in 2019, while Abu Dhabi Commercial Bank's projects the CPI index to decline 0.9 percent this year.

(Reporting by Saeed Azhar; editing by Davide Barbuscia and Andrew Heavens)

((Saeed.Azhar@thomsonreuters.com; +971 44536787; Reuters Messaging: saeed.azhar.reuters.com@reuters.net))

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