Saudi Arabia's central bank said it expected relative price stability or a slight decline in inflationary pressures in the near-term, it said in its latest inflation report published on Sunday. "There are two factors that may... lead to the expectation of a relative stability or a slight decline in the inflationary pressures in the coming period," the Saudi Arabian Monetary Agency said on its website.
"These include a decline in world food prices, and relative stability in the domestic market." Analysts polled by Reuters in December expected average inflation of 5.0 percent this year.
The world's top oil exporter pegs its riyal currency to the US dollar which limits flexibility of its monetary policy to control inflation.