Saudi inflation rate eases further in March to 4.9%

The annual 4.9% increase was mainly due to food and transport prices, which rose 10.2% and 10.5% respectively, the General Authority for Statistics said

  
The King Fahd highway in Riyadh, Saudi Arabia. Image use for illustrative purpose

The King Fahd highway in Riyadh, Saudi Arabia. Image use for illustrative purpose

Gettyimages

DUBAI - Saudi Arabia's inflation rate fell to 4.9% in March from 5.2% the previous month, easing further to its lowest since authorities hiked value-added tax last year to increase non-oil revenues as crude prices declined.

"Consumer prices still reflect an increase of the Value Added Tax (VAT) from 5% to 15% in July 2020," the General Authority for Statistics said.

The annual 4.9% increase was mainly due to food and transport prices, which rose 10.2% and 10.5% respectively, it said.

Annual inflation was 3.4% in 2020, picking up in the second half of the year after the VAT hike. The first half had seen mild inflation, following a deflationary trend in 2019, when the annual rate was -2.1%.

The economy of the world's top oil exporter shrank 4.1% last year, but the rate of decline slowed in the third quarter as some COVID-19 restrictions were lifted.

The economy is expected to grow 2.9% this year, the International Monetary Fund has estimated. It has forecast consumer price inflation will average 2.7% this year.

(Reporting by Davide Barbuscia; Editing by Toby Chopra) ((Davide.Barbuscia@thomsonreuters.com; +971522604297; Reuters Messaging: davide.barbuscia.reuters.com@reuters.net))

More From GCC