The Saudi economy has failed to bring inflation below 5 percent

The average consumer price index in the largest economy in the Arab world reached 5.8 percent by the end of November, unchanged from the same period a month earlier, and the highest inflation recorded in the last three months in the United Arab Emirates. It has been a country.

Among the various sectors, the highest inflation was related to the food and beverage sector with 13%, followed by communications with 11.1% and home appliances with 7.6%. On the other hand, the lowest inflation was related to education with a negative 8.6 percent, followed by water and electricity with a negative 0.8 percent.

“Inflation in the food sector remains high, probably due in part to quarantines and people’s willingness to store large quantities of these items,” said Jason Tui, an emerging market expert at Capital Economics. We expect the inflation rate to remain at the current high level due to the implementation of the VAT increase bill.

Saudi Arabia has said it has raised its VAT rate to 15 percent since the beginning of the month, given declining government revenues and falling oil prices on world markets. The Saudi government’s budget deficit has been steadily rising in recent months, and the country’s foreign exchange reserves reached their lowest level in a decade in May.

On a monthly basis, Saudi Arabia’s inflation rate was negative at 0.1 percent in November, down 0.2 percent from the previous month. The average inflation rate in Saudi Arabia between 2000 and 2020 was 2.49 percent, with the highest recorded figure in July 2008 at 11.1 percent and the lowest recorded in February 2019 at minus 2.2 percent. ISNA