Determinants of Inflation in Saudi Arabia

Journal Article

• نوع عمل المنشور: ورقة بحث
• المجلة \ الصحيفة: World Review of Business Research
• رقم العدد: 4
• رقم الإصدار السنوي: 1
• الصفحات: 109-114

مستخلص المنشور

 This paper investigates the factors that affect the rate of inflation in Saudi Arabia. The inflation in Saudi Arabia was very low during the eighties and nineties; however, it has started accelerating since 2003. This paper utilizes a model which incorporates both domestic and foreign factors affecting the rate of inflation. The findings suggest that external factors are the main source of inflation, which is consistent with the fact that the Saudi economy is very open and most goods are imported from the outside world. The increase in world prices and the fall in the Dollar are found to be important determinants of the inflation rate in both the short and long run. Also the increase in domestic demand, which has resulted from the increase in oil prices, has raised the inflation rate.