GCC Inflation to Stay Manageable in 2021

GCC Inflation to Stay Manageable in 2021

Oxford Economics said in its report on regional economies the region will continue to endure disinflationary pressure in the near term despite a big spike in food prices over the past year. (Shutterstock) Weak outlook for domestic currencies will continue to stoke inflationary pressures stemming from climbing global food, shipping costs Oxford Economics said in its report on regional economies the region will continue to endure disinflationary pressure in the near term despite a big spike in food prices over the past year. However, a weak outlook for domestic currencies, which are pegged to the US dollar, will continue to stoke inflationary pressures stemming from climbing global food and shipping costs. Transport price inflation is also set to edge up. "We don't think the rise in food inflation is a cause for concern because it has disinflationary counterweights. In particular, falling rents continue to make a large negative contribution to housing costs and overall inflation. This segment, which makes up 27 per cent on average in the region's consumer basket, has been on a downward trend since late 2016," said Maya Senussi, senior economist at Oxford Economics. Rentals have declined almost continuously since early 2018 in Saudi Arabia and the