For the first six months of 2014, the overall Consumer Price Index (CPI) declined by 0.3 percent, while clothing and footwear spiked, according to figures released by the Central Administration of Statistics (CAS).

In that period, the price index of clothing and footwear registered the largest increase at 28 percent. “This category is seasonal, and subject to sales, and I expect that in July the index on clothing and footwear will go down, with a new sales round,” said Nabil Fahd, Chairman and CEO of Fahed Group Sal, a large retailer.

In that same period, Food and Non-Alcoholic beverages recorded a drop of nearly five percent. “Economic growth is negative, and competition intensifies leading to reduced prices not only from retailers but as well wholesalers and distributors,” Fahd said. He said there will be a ceiling at which prices will stabilize.

Alcohol and tobacco decreased 0.5 percent but noticeable in March was a 32 percent rise in that index. Fahd said it was a combination of rising tobacco prices and a campaign to reduce smuggling of alcoholic beverages.

“I forecast a continued decline in the CPI, until November and a pick-up in December barring any catastrophic economic events,” Fahd said. 

The CPI rose 2.5 percent in June, year on year.  CPI dropped a maximum of 0.7 percent in June 2014, compared to the previous month.