Official data released on Sunday, by Saudi Arabian government show an increase in consumer price index by 5.8% in October compared with the same month last year.
The COVID-19 pandemic has caused a steep economic contraction in the world’s largest oil exporter’s economy due to a drop in global crude demand and measures to contain the coronavirus.
“Taking into account the effect the increase of the Value Added Tax (VAT) from 5% to 15% in July 2020 had on consumer prices throughout the Kingdom, the rise of the CPI originated mainly from the increase in prices of Food and Beverages (+13.0%) and Transport (+7.0%),” said the General Authority for Statistics.
Reuters reported that the authority said, food and beverages recorded the highest annual price increase and were the main driver of the October inflation rate.
The VAT increase has contributed to increase in non-oil revenue in the third quarter, but economists have said it may dampen economic recovery.