Annual inflation in Saudi Arabia eased off from a peak of at least 30 years to 10.9 percent in August as gains in rents and food prices steadied in the largest Arab economy, official data showed on Sunday.
The Saudi cost of living index was 117.9 points on August 31, according to Central Department of Statistics data carried by state-run Saudi Press Agency (SPA). That compared with 106.3 points a year earlier.
Food and beverage prices gained an annual 15.8 percent in August down from 16 percent a month earlier, while rental index - which includes rents, fuel and water - added 18.5 percent down from 19.8 percent in July.
Inflation of 11.1 percent in July was the highest in at least 30 years. The annual increases of food and rent prices in August are the lowest since June.
Inflation is a key challenge across the Gulf Arab region, where most states peg their currencies to the dollar, a fact that has contributed to inflation as weakness in the US currency drove up import costs.
The economies of Saudi Arabia, the world's top oil exporter, and its neighbours are surging on a more than five-fold rise in oil prices since 2002. Analysts expect annual inflation to hit its peak towards the end of the third quarter, which coincides with the end of Ramadan, the Muslim month of fasting, during which consumption and prices tend to rise.
Consumer prices rose 0.5 percent in August compared with July, when month-on-month price rises hit 1.6 percent, their fastest pace of growth in at least nine years.
Saudi Arabia, which has insisted it will keep its riyal's dollar peg, has tried to offset the impact of inflation on its 25 million people by raising public sector wages and boosting subsidies this year. The kingdom has also taken measures to curb public spending and tightened bank lending curbs to prevent lower borrowing costs from stoking inflation. Dollar pegs oblige the Gulf Arab states, bar Kuwait, to track US interest rate cuts, including seven in the last year.