Saudi Arabia’s Inflation Rate Surged to 6.1% in July on VAT Hike
(Bloomberg) -- Saudi Arabia’s inflation quickened at the fastest pace since at least 2012 after the kingdom tripled its value-added tax.
Consumer prices rose an annual 6.1% in July from 0.5% in June, data released by the General Authority for Statistics showed on Sunday.
The increase was driven mainly by an acceleration in the cost of food and beverages -- which rose more than 14% compared with last year -- and transport, which rose 7.3%. Reductions in fuel and gasoline prices offset the broader inflation pickup.
Saudi Arabia increased its value-added tax from 5% to 15% on July 1, part of the government’s measures to compensate for lower oil prices as the coronavirus pandemic and crude market turmoil cut deeply into state revenue.
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