Inflation in Saudi Arabia rises to 5.8% in October 2020

Saudi Arabia’s inflation accelerated to 5.8% in October 2020, according to recent data by the General Authority for Statistics (GASTAT).

The authority attributed the growth in inflation to an increase in value-added tax (VAT) from 5% to 15% from July 1.

The cost of living index for October rose to 104.1 points according to the base year 2018, compared to 98.4 points the year before.

GASTAT has adopted 2018 as the new base year as of February 2020.

The consumer price index (CPI) rise was mainly driven by a surge of 13% year-on-year (YoY) in the average prices of food and beverages and a 7% increase in the transport sector as vehicle prices grew by 10.1%.

Tobacco sector rose 13.2% due to a 12.5% jump in cigarette prices.

Meanwhile, education sector declined by 8.6% as the pre-primary and primary education dropped by 12.4%, while intermediate and secondary education fell by 11.1%.

Housing, water, electricity, gas and fuel sector was also 0.7% down, due a 1.5% decline in actual housing rents.

The table below illustrates the change in the CPI comparison YoY in October 2020:

The CPI reflects price changes of a fixed basket of goods and services that includes 490 items. The items were chosen based on the results of the Household Expenditure and Income Survey conducted in 2018.

Prices are collected through point of sale (POS) field visits.

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