Saudi Arabia's annual inflation reached 4.9 percent in July 2011, up from 4.7 percent in June 2011, according to the Saudi Central Department of Statistics and information. Prices rose 1.2 percent on a monthly basis, whereas CPI reached 135.8. The increase is attributed to the growth in demand during the summer season as well as the build up for the month of Ramadan, characterized by heavy consumption, which coincided this year with August. Beltone Financial, a leading Cairo-based investment bank, expects inflation to accelerate throughout 2011 on basis of growth in money supply. It, however, forecast that the weakening global commodity prices will offset some of the imported inflationary pressures in Saudi Arabia. A possibly depreciating US dollar could increase Saudi Arabia's cost of imports and force inflation rate to soar, according to the investment bank's note.
