Saudi November inflation at 5.8% y/y on higher food prices

DUBAI: Saudi Arabia's consumer price index increased by 5.8% in November compared with the same month last year, official data showed on Tuesday, while remaining the same as October's rate.

The world's largest oil exporter is facing a steep economic contraction this year amid low oil prices, while coronavirus-induced restrictions curbed global crude demand and hurt domestic activity.

"Granted that the increase in the Value Added Tax (VAT) from 5% to 15% in July 2020 had an overall influence on consumer prices throughout the Kingdom, the rise of the CPI originated mainly from the increase in prices of Food and Beverages (+13.0%) and Transport (+8.0%)," the General Authority for Statistics said.


The consumer price index decreased by 0.2% year-on-year in November 2019.

Higher food prices were the main driver of the increase, the authority said.

"In particular, the increase of prices of Meat (+14.8%) and Vegetables (+22.2) was remarkable," it said.

The VAT hike contributed to an increase in non-oil revenue in the third quarter, but economists have said it will likely dampen economic recovery.