• Inflation rose at 6.2% in August after revising value-added tax


    ​Ikrami Abdullah from Riyadh​​​

    The inflation rate in Saudi Arabia rose during last August at 6.2 percent on an annual basis, compared to the same month of 2019, while it rose slightly at 0.2 percent on a monthly basis, compared to the previous July 2020.
    According to the monitoring unit of the reports in Al-Eqtisadiah newspaper, based on official data, the inflation rate in August is the highest since the base year was revised to 2013, with the start of work to amend the value-added tax rate from 5 per cent to 15 per cent starting in early July.
    The Saudi 2020 budget statement document had expected inflation to return to positive rates over the next three years, and according to the statement, it is likely that the inflation rate will reach 2 percent in 2020 and 2021, then 1.8 percent in 2022.
    Inflation recorded a contraction within 12 months (from the beginning of 2019 until December of the same year), after 14 months of positive inflation, as it recorded positive levels during the last two months of 2017, in addition to the whole of 2018.
    The rise in inflation last month, compared to the same month of 2019, came mainly as a result of the food and beverage division's index rising by 13.5 percent, given that it is the second largest category affecting inflation with a weight of 18.87 percent.​

    ​The index for "tobacco" increased by 13 percent, "communications" by 9.6 percent, "home furnishing and equipment" by 8.4 percent, and "restaurants and hotels" by 7.7 percent.
    Spending on the "transportation" category also rose by 8.2 percent, "clothing and footwear" by 5.3 percent, "various personal goods and services" by 5.2 percent, and "entertainment and culture" by 2.3 percent.
    The "health" section rose by 2 percent, "education" by 1.2 percent, and "housing, water, electricity, gas, and other fuels" by 0.2 percent.​
    The "housing, water, electricity, gas and fuel" section tops the weights of the 12 sections that make up inflation with a weight of 25.3 percent, then "food and beverages" by 18.8 percent, then "transportation" 9.9 percent, and "home furnishing and maintenance" and "communications" with a weight of 8.5 percent. Cent each.
    Behind it comes the section "Restaurants and Hotels" with a weight of 6.5 percent, then "clothes and shoes" at 6.2 percent, "advanced goods and services" at 5.7 percent, "education" 4.2 percent, "recreation and culture" at 3.4 percent, and " Health "2.3%," "tobacco", weighing 0.7%.

    Economic Reports Unit​

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