We have revised higher our inflation forecast for 2011, in line with anecdotal reports of fast-rising foodstuffs and gas prices (the latter reflecting supply disruptions). In addition, the riyal has begun to weaken once more, pushing up the cost of imports. As a result, we forecast that average inflation will rise from 11.2% in 2010 to 16% in 2011, before dipping to 11.6% in 2012 as global non-oil commodity prices decline.