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Saud Arabia’s inflation expected to rise in Q1-21

Saud Arabia’s inflation expected to rise in Q1-21
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Riyadh – Mubasher: Saudi Arabia’s inflation rate is predicted to grow in the first quarter (Q1) of 2021 when compared to the corresponding period a year earlier, the Saudi Central Bank (SAMA) said in a report. 

This rise is driven by the ongoing effect of the tripling of the value-added tax (VAT) to 15% from 5% starting from July 2020.

“The projected inflation rate for Q1-21 is not significantly different from the rate recorded in Q4-20,” the report said.

In Q4-20, the consumer price index (CPI) registered a yearly increase of 5.6% and a quarter-on-quarter (QoQ) drop of 0.1%.

During last year’s October-December period, tobacco recorded the highest annual increase rate in the general price index with 13.4%, followed by food and beverages with 12.9%, and communication with 11.3%. On the other hand, education recorded the highest yearly decline of 8.6%.

Meanwhile, the wholesale price index (WPI) rose by 5.4% annually.

Recently, the Institute of International Finance (IIF) expected the kingdom’s non-oil real gross domestic product (GDP) to expand by 3% in 2021 following a 2.7% contraction in 2020.