Inflation to return to normal on subsidy cuts, VAT: Alkholifey

Saudi Arabia’s inflation rates will return to normal levels, following energy price hikes and the implementation of the value-added tax (VAT) starting January 2018, Ahmed Alkholifey, Governor of the Saudi Arabian Monetary Authority (SAMA), said on Tuesday.

The deflation seen this year did not have a negative impact on financiers, savings, or the commodities market, Alkholifey added during a press conference.

In January 2017, Saudi Arabia’s inflation rate turned negative for the first time in over 10 years, as prices fell by 0.4 percent compared to a rise of more than 4 percent in January 2016.

The economy  remained in deflation for the tenth consecutive month in October, with the consumer price index (CPI) slowing to -0.2 percent, according to data issued by the General Authority for Statistics (GAS).