Inflation Decelerates for 2nd Consecutive Month in KSA

Inflation rate in the Kingdom of Saudi Arabia (KSA) decelerated in August for the second month in a row, as the effects of the July 2020 tripling of the VAT rate no longer weigh on spending. The consumer price index (CPI), a gauge used to detect the changes in prices, recorded a modest increase in August of 0.3 % compared to the same month a year ago.

But the CPI increase represents a sharp drop from the annual rate recorded in June at 6.5 %, according to the General Authority for Statistics (Gastat). This fall reflects the diminishing impact of the increase in VAT from 5 % to 15 % that significantly affected the consumer price index levels starting from July 2020.