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Saudi government expects inflation to hit 3.7% after VAT hike

FILE PHOTO: A Saudi woman wearing protective gloves buys vegetables at a supermarket, following the outbreak of the coronavirus disease (COVID-19), in Riyadh, Saudi Arabia May 11, 2020. REUTERS/Ahmed Yosri

DUBAI (Reuters) - Saudi Arabia’s government expects inflation to reach 3.7% in 2020, partially due to an increase in its value-added tax rate, it said in a preliminary budget statement on Wednesday.

The government expects inflation to hit 2.9% in 2021, the document showed.

Reporting by Davide Barbuscia and Marwa Rashad; Editing by Gareth Jones

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