DUBAI - Saudi' Arabia's main index fell sharply in early trade after the kingdom said it will triple its value-added tax rate and suspend a cost of living allowance for state employees to shore up finances.

The Tadawul index was down almost 2.8% at 0727 GMT. Other main Gulf markets were also in the red, with Dubai's down 2.3%.

The austerity measures are being introduced as the world's largest oil exporter suffers from slumping oil prices, while at the same time fighting the new coronavirus outbreak. 

(Reporting by Saeed Azhar, editing by Louise Heavens) ((Saeed.Azhar@thomsonreuters.com; +971 44536787; Reuters Messaging: saeed.azhar.reuters.com@reuters.net))