JEDDAH, Saudi Arabia, (Reuters) – Saudi Arabia’s annual inflation eased to 4.9 percent in June, its lowest level since September last year, despite a big rise in housing prices, official data showed on Tuesday.

Inflation slowed from 5.1 percent in May. The month-on-month rate in June was unchanged from 0.2 percent in May, according to the Central Department of Statistics.

“I think it is probably lower commodity prices globally and a reflection of a strong dollar and a weaker euro, because about 28 percent of Saudi imports are from Europe and that makes a difference,” said James Reeve, senior economist at Samba Financial Group. Saudi Arabia pegs its riyal currency to the dollar.

Prices of housing, rents and water jumped 8.8 percent from a year earlier in June. Saudi Arabia suffers from a housing shortage that drives up real estate prices; last year the government promised to build half a million new homes and last week it passed a mortgage law designed to stimulate house building, but analysts believe high land prices may prevent any quick resolution to the problem.

Other price categories were relatively subdued; food prices, which account for 26 percent of Saudi consumer expenses, climbed 4.7 percent in June and clothing gained 2.9 percent.