Saudi Arabia’s consumer price inflation was largely stable at 4.2% Y-o-Y in April compared to 4.3% in March, data released by the General Authority for Statistics show. Inflationary pressures remained largely muted, confirming our view that second round effects of January’s fiscal consolidation measures are likely to be limited. Food prices inched up 0.2% M-o-M in April but have fallen 1.8% YTD thanks to low global commodity prices and a strong dollar. Non-food inflation was also muted rising only 0.3% M-o-M driven mostly by increases in health sectors (specifically outpatient health services). We expect inflation to remain muted, with companies only gradually passing rising cost pressures from lower subsidies. Our average inflation forecast for 2016 stands at 4.5% Y-o-Y. (General Authority for Statistics, Mohamed Abu Basha)