DUBAI - Arabia's consumer price index increased by 5.8% in October compared with the same month last year, official data showed on Sunday, rising slightly above September's 5.7% rate.
The world’s largest oil exporter is facing a steep economic contraction this year after the COVID-19 pandemic curbed global crude demand and measures to contain the coronavirus hurt domestic activity.
"Taking into account the effect the increase of the Value Added Tax (VAT) from 5% to 15% in July 2020 had 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 (+7.0%)," said the General Authority for Statistics.
Food and beverages recorded the highest annual price increase and were the main driver of the October inflation rate, the authority 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.
(Reporting by Davide Barbuscia; Editing by Stephen Coates) ((Davide.Barbuscia@thomsonreuters.com; +971522604297; Reuters Messaging: firstname.lastname@example.org))