Palm trees and buildings in Saudi Arabia

Saudi Arabia Inflation May 2021

Saudi Arabia: Inflation continues to accelerate in May

Consumer prices increased 0.18% over the previous month in May, marginally stronger than April’s 0.17% rise. May’s print reflected higher prices for transport, clothing and footwear, and food and beverages.

In May, inflation rose to 5.7% from 5.3% in May. Elevated inflation over the past eleven months has been due to the increase in the value-added tax rate from 5% to 15% back in July 2020. In addition, the stark fall in activity due to the pandemic last year should have also boosted the headline reading. Meanwhile, annual average inflation increased to 5.2% in May, up from 4.8% in the previous month.

Going forward, inflation will likely begin to taper at the end of Q2 2021, as the impact of a low base effect from the tripling of the VAT and recovering economic output begins to fade. Furthermore, some easing of goods shortages as supply chains normalize in H2 this year, thanks to the easing of restrictions both domestically and globally should help temper inflation. That being said, the ongoing economic recovery and relatively higher oil prices will keep inflation upbeat, nonetheless.

Free sample report

Access essential information in the shortest time possible. FocusEconomics provide hundreds of consensus forecast reports from the most reputable economic research authorities in the world.
Close Left Media Arrows Left Media Circles Right Media Arrows Right Media Circles Arrow Quote Wave Address Email Telephone Man in front of screen with line chart Document with bar chart and magnifying glass Application window with bar chart Target with arrow Line Chart Stopwatch Globe with arrows Document with bar chart in front of screen Bar chart with magnifying glass and dollar sign Lightbulb Document with bookmark Laptop with download icon Calendar Icon Nav Menu Arrow Arrow Right Long Icon Arrow Right Icon Chevron Right Icon Chevron Left Icon Briefcase Icon Linkedin In Icon Full Linkedin Icon Filter Facebook Linkedin Twitter Pinterest