The Saudi Arabian Monetary Agency (SAMA) said inflation during the first quarter had declined to 1.1 percent down from 1.5 percent in the three months to end-December.
"For the second quarter, the occurrence of sharp inflationary pressures is ruled out but it is expected that inflation continues at the same level recorded in the first quarter from continued inflationary pressures in renovation, rent and water and external inflationary pressures on food and beverages," SAMA said in a report.
Food and beverage prices account for a 26 percent weighting in the cost of living index used to track Saudi inflation. The renovation, home rent, fuel and water group accounts for 18 percent of the index.
Saudi inflation hit a 10-month peak of 4.9 percent in April as concerns about global harvests continued to boost food prices in the import-reliant Kingdom.
Price pressures are seen rising again this year as oil-exporting economies recover but inflation is expected to stay in low single digits across the Gulf.
Saudi Arabia is among the world's top five rice importers and became a major wheat importer in 2008 after abandoning a 30-year self-sufficiency plan.
A housing shortage is seen as the main driver of home rent inflation. A new mortgage law is on the cards, which would open up home ownership to more of the 25 million population, less than a third of whom currently owns property.
The low home-ownership ratio is seen by analysts as reflecting weaknesses in Saudi Arabia's wealth distribution policies, which the government has been seeking to address.
Inflation in Saudi Arabia fell to 5.1 percent in 2009 from 9.9 percent in 2008, the highest in more than 20 years. SAMA said inflation over 2004-2008 averaged 3.4 percent annually.
However, it accelerated on a quarterly basis in 2009, rising to 1.5 percent in the fourth quarter from 1.2 percent in the third quarter and 0.5 percent in the second quarters.
