The General Statistics Department said annual inflation rose to 5.5 percent in June, up from 5.4 percent in May.

Annual inflation in the Kingdom started picking up again after slowing to a 30-month low of 3.5 percent in October, but the inflation is still well below a record high of 11.1 percent in July 2008.

The slight inflationary jump is not unanticipated but could be signaling a possible plateau in price pressures that could become more significant after Ramadan. June inflation jumped by a small amount compared to May but regulators should remain vigilant of the price pressures that build up in the next two months which demonstrate a high seasonality factor due to food price increases, John Sfakianakis, chief economist at Banque Saudi Fransi, said.

However, Sfakianakis said: "The current situation doesn't warrant a change of course in terms of monetary policy as food and housing price pressures which are the main causes of inflation are supply and market structure-related challenges that require different policy measures."

Housing costs, which account for 18 percent of the cost of living index's weighting, rose 0.9 percent month-on-month in June and were up 9.2 percent for the year.

Food prices, which have the largest 26 percent weight in the basket, rose 0.6 percent month-on-month in June. They are 6.2 percent higher compared to June 2009.

Commenting on rising inflation, Jarmo T. Kotilaine, chief economist at NCB Capital, said this highlights the fact that inflation has turned into one of the primary macroeconomic imbalances and policy concerns in Saudi Arabia. In this regard, the situation in the Kingdom echoes developments in other emerging markets.