Saudi inflation slows in June before VAT increase


DUBAI, July 15 (Reuters) - Saudi Arabia's consumer price index rose 0.5% in May from a year earlier, the smallest annual increase since January, official data showed on Wednesday.

Food prices, which went up 6.9% year-on-year, were the main driver for the increase in the overall inflation rate, the General Authority for Statistics said.

Saudi Arabia has ordered a tripling of value-added tax to 15%, starting this month, as it seeks to boost state revenues battered by low oil prices and the coronavirus pandemic.

"The inflation picture will take a turn for the worse this month after the VAT rate was tripled from 5% to 15% on 1st July," said Jason Tuvey, senior emerging markets economist at Capital Economics.

"We expect Saudi inflation to jump to 5.5-6.0% year on year this month and remain around this level for much of the next year," he said in a research note.

(Reporting by Davide Barbuscia, editing by Larry King)

((; +971522604297; Reuters Messaging:

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


More Related Articles

Info icon

This data feed is not available at this time.

Sign up for the TradeTalks newsletter to receive your weekly dose of trading news, trends and education. Delivered Wednesdays.