August data reveal sharp uptick in prices in hotel and restaurant sector But price increases in other sectors slow leaving overall inflation rate flat LONDON: The cost of eating out or enjoying a night’s stay at a hotel in Saudi Arabia increased at the fastest rate recorded in five years last month, according to government statistics. August’s consumer price data show that restaurant and hotel inflation rose to a new high of 8.4 percent year-on-year in August from 7.6 percent year-on-year in July. Slower price increases in other categories ensured the headline inflation rate for the Kingdom remained relatively flat, with inflation staying at 2.2 percent year-on-year in August, unchanged from the previous month. Analysts forecast that the Kingdom’s inflation rate will likely pick up again towards the end of the year. “We still expect it to rise a little over the rest of this year as underlying price pressures pick up,” said Jason Tuvey, senior emerging markets economist at Capital Economics, on Tuesday in a research note. Inflation in Saudi Arabia peaked earlier this year at 3 percent following the introduction of the new value-added tax on certain goods and the government-imposed price hikes on the cost of energy at the start of 2018. Consumer prices are expected to drop again in the new year as the impact of the VAT charge lessens, analysts predict. “The upshot is that we expect that inflation will fall to around 1 percent year-on-year in January 2019,” said Tuvey in a note. Food inflation - which represents 20 percent of the basket of goods and services used to calculate the growth rates in consumer prices - edged downwards in August to 6.6 percent year-on-year compared to 6.7 percent in July. The cost of food had jumped in July, with vegetables in particular becoming more expensive with inflation hitting 8.1 percent year-on-year compared to a decline of 0.8 percent year-on-year recorded in June.