Inflation eases in Saudi Arabia, lowest in 14 months

Share
1 min read
Share
  • The consumer price index (CPI) recorded a modest increase in August of 0.3 percent
  • The slowdown was led by non-food prices, particularly by weaker inflation in the clothing and transport sectors

Inflation in Saudi Arabia is on the decline for the second month consecutively, dropping to the lowest level since June 2020.

The fall reflects the diminishing impact of the increase in VAT from 5 percent to 15 percent that significantly affected the consumer price index levels starting from July 2020.

The consumer price index (CPI), a gauge used to detect the changes in prices, recorded a modest increase in August of 0.3 percent compared to the same month a year ago. But the CPI increase represents a sharp drop from the annual rate recorded in June at 6.5 percent, according to the General Authority for Statistics (Gastat).

The slowdown was led by non-food prices, particularly by weaker inflation in the clothing and transport sectors.

An economist said headline inflation will pick up to 1 to 1.5 percent year-on-year in next two years.

“Looking ahead, we think that headline inflation will stay around its current level until the end of year and hover at 1 to 1.5 percent year-on-year throughout the next couple of years,” James Swanton of Capital Economics said.

SPEEDREAD


Today's Headlines

The most important news stories of the day, curated by Post editors and delivered every morning.

Google reCaptcha: Invalid site key.

By signing up you agree to our Terms of Use and Privacy Policy.

MORE FROM THE POST