“When you’re looking at wholesale prices they tend to reflect global supply forces much more resolutely compared to the CPI [consumer price index] numbers,” said Nicolas Crittenden, assistant economist at London-based consultancy Capital Economics.
“Saudi actually has remarkably stable CPI inflation,” said Crittenden, who cited the Saudi riyal’s peg to the US dollar, energy subsidies and Saudi Arabia’s “flexible labour market” as forces keeping prices stable.
“Given that Saudi Arabia kind of wants to go through an expansionary phase in the economy, tightening monetary policy won’t be very helpful,” he said.