Saudi Arabia’s inflation edged down to 2.4 percent in December, according to the Central Department of Statistics.

The consumer price data, cited by Reuters, showed that inflation at its lowest level since at least September 2012, when the current data series began.

Prices of food and beverages rose 2.6 percent from a year earlier, while housing and utility costs gained 2.5 percent.

Analysts polled by Reuters in September expected average inflation in Saudi Arabia to slow to 3.0 percent in 2014 and accelerate again to 3.7 percent in 2015 from 3.5 percent in 2013.

The data are based on the 2007 consumer basket with the series beginning in September 2012.

In a recent report, researchers from Jadwa Investment said that the sluggish global economic recovery and falling import costs due to a strengthening US dollar means that risks of external inflationary pressure in the Kingdom are firmly on the downside, with an interest rate hike on the horizon likely to put further downward pressure on prices.

However, the main sources of inflation should continue to be food prices and housing.

Food accounts for 22 percent of the total basket of goods and services that make up the Kingdom’s Consumer Price Index (CPI), according to the report.

The slow progress in government housing initiatives means that the shortage in supply of homes should persist through 2015, and thus continue to put upward pressure on home prices and rents.

“Overall, we expect muted inflationary pressures leading an average headline inflation rate of 2.6 in 2015,” said the Jadwa researchers.

“In 2015, we expect a slower increase in credit and money supply growth, mainly due to a psychological response to a number of domestic and external factors. The broader economic factors — mainly lower oil prices and the prospect of government deficits – are likely to play a role in the cooling off of domestic economic demand and activity,” they said.

“We believe that higher interest rates will not have a major implication on credit growth given the low pass-through effect.,” said the report.