Despite the moderation in price rises, the twin engines of inflation, rental and food costs, continued to show large increases. Rental prices rose by 18.5 per cent in the year to the end of May, while food and beverage costs rose by 15.1 per cent during the same period.

Economists in the region say they expect inflation in Saudi Arabia and other Gulf countries to stabilise at high levels, but not to start declining yet.

Marios Maratheftis, regional head of research at Standard Chartered, says: “The fall to 10.4 per cent from 10.5 per cent is negligible and not an improvement.”