Saudi inflation rate decelerates as impact of VAT increase fades

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Riyadh/Moscow

Inflation rate in Saudi Arabia decelerated in July from June on annual basis as the effects of the July 2020 tripling of the VAT rate no longer weigh on spending.

The consumer price index, a gauge used to detect the changes in prices, recorded a modest increase in July of 0.4 percent compared to the same month a year ago, but this increase is a sharp drop from the annual rate recorded in June of 6.2 percent, data from General Author-ity for Statistics (Gastat) showed.

The sharp fall in annual inflation reflects the diminishing impact of the increase in VAT from 5 percent to 15 percent that significantly affected the consumer price index levels start-ing from July 2020, the authority said on its website today.—AN

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