Tuesday 29, May 2018 by Kudakwashe

Saudi inflation falls to its lowest level this year

Saudi Arabia’s inflation edged down 0.2 per cent month-on-month in April, recording the lowest rate this year.

  

The year-on-year inflation in April was the lowest, having reached 2.8 per cent in March, 2.9 per cent in February and three per cent in January.

Consumer price inflation increased 2.5 per cent in April, compared to the same period last year, driven mainly by the rise in tobacco, transport, food and beverage prices following the kingdom’s introduction of several new taxes, reported Zawya.

The Saudi government introduced a five per cent value added tax (VAT) in January this year. It also implemented a 100 per cent selective tax on tobacco and energy drinks and a 50 per cent tax on soft drinks from June last year.

Prices of the housing, utilities, gas and other fuels category, which constitute a large weighting in the consumer price index, also increased 0.5 per cent on an annual basis.

The International Monetary Fund in its latest report forecast suggested that inflation in Saudi Arabia will reach 3.7 per cent in 2018 (up from a deflation of 0.9 per cent in 2017), and fall to 2 per cent in 2019.

 

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