Saudi Arabia’s annual inflation rate rose to 6.2% in June, the highest this year, from 5.7% in May, official data showed on Thursday.
June marked a third consecutive monthly rise reflecting an increase in value-added tax introduced last year.
“Noting that consumer prices still reflect an increase of the value added tax (VAT) from 5% to 15% in July 2020, the rise of the CPI resulted mainly from higher prices of transport (+22.6%) and food and beverages (+8.1%),” the General Authority for Statistics said.
To help alleviate rising living costs, Saudi Arabia, the world’s largest oil exporter, last week set a cap on local gasoline prices for July.
Month on month, consumer prices in June increased by just 0.2%, the statistics authority said.
Inflation is expected to start declining from July as the base effect of the VAT increase will drop out of the annual price comparison, London-based Capital Economics has said, Reuters reported.
It estimated the headline rate will slow to around 1%-1.5% year on year.
The International Monetary Fund has said it expects annual average inflation of 3.2% this year.
