Deflationary trend continues in Saudi Arabia

The deflationary trend seen in the last few months continued into May, with the Kingdom seeing a reduction in prices by 0.7 year-on-year, said a report issued by Jadwa Investment.
While housing and utilities showed flat growth during the month, other major components of inflation, especially food and transport, are still exhibiting negative growth.
According to the report, economic data showed a slightly weaker picture in May. Point-of-sale transactions were up 6.4 percent year-on-year compared to 11.4 percent in previous month. ATM withdrawal remained negative year-on-year at 3.8 percent.
Data on first quarter gross domestic product (GDP) showed that the economy contracted by 0.5 percent year-on-year. Growth, the report said, was mainly dragged by the oil sector while non-oil GDP showed better growth at 0.6 percent. The manufacturing sector was a rapid rise in growth, it added.
The Saudi Arabian Monetary Agency’s (SAMA) foreign reserve assets fell by $1.2 billion in May month-on-month, which was the lowest decline since June of last year. The net monthly change to government accounts with SAMA was negative in May with no change in government reserves; the change in accounts was wholly due to a decline in government deposits by SR6.2 billion.
According to the report, long-term credit grew by 8 percent in May but year-on-year growth in short- and medium-term bank credit to the private sector remained negative.
Long-term credit now makes up 32 percent of total private sector loans compared to 29.3 percent a year ago.

Source: Arab News