Saudi Arabia’s Inflation Soars to 6.1% after Tripling of Value Added Tax

Saudi Arabia's consumer price index leapt by 6.1% in July 2020 from just 0.5% in June 2020, in a recent statement released by Saudi Arabia’s General Authority for Statistics (GaSTAT).

The 0.5% annual inflation rate in June 2020 was the smallest increase since January 2020, until the Kingdom increased its value added tax (VAT) from 5% to 15% on the 1st of July, 2020. GaSTAT reported that the jump was reflective of general price increases compared to last year, most notably of the food and beverage sector by 14.6% year-on-year (YoY) and transport sector by 7.3% YoY, which was offset by the fall in fuel and gasoline prices.

The economy of the largest oil exporter in the world suf...