Inflation in Saudi Arabia has fallen to 5 per cent in 2011, the lowest level for four years. A drop in global food prices led to the decline in inflation from 5.3 per cent in 2010.

Although price growth is falling in the kingdom, inflation in Saudi Arabia is still the highest of all the GCC countries.

Inflation in Saudi Arabia in 2012 is expected to remain at about the same level, mainly driven by rent, food prices and housing services. The UK’s Barclays Capital is forecasting inflation of 4.7 per cent in 2012.