Inflation in Saudi Arabia rises to 5.7% in January 2021

Saudi Arabia’s inflation accelerated to 5.7% in January 2021, 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 1,2020.

The cost-of-living index for January rose to 104 points according to the base year 2018, compared to 98.37 points the year before.

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

The consumer price index (CPI) rise was mainly driven by a surge of 12.3% year-on-year (YoY) in the average prices of food and beverages, affected by an increase of 12.6% in food prices. It was followed by a 9.6% rise in the transport sector as vehicle prices grew by 11.1%.

Telecommunication sector recorded the highest rise by 13.8%, affected by 16.3% increase in the telephone and fax services prices.

Meanwhile, education sector declined by 9.8% as the pre-primary and primary education dropped by 14.2%, while intermediate and secondary education fell by 12.2%.

Housing, water, electricity, gas, and fuel sector was also 0.9% down, due to a 1.7% decline in actual housing rents.

The table below illustrates the change in the CPI comparison YoY in January 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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