Saudi Arabia’s inflation will slow in 2019: Report

Inflation in Saudi Arabia will average 3 percent in 2018 before moderating to an average of 2.3 percent in 2019 as the impact of the VAT disappears, Spain-based FocusEconomics said in a report.

Inflation stood at 2.2 percent in August, unchanged from the previous month. Looking ahead, economic growth is expected to accelerate due to higher oil prices compared to last year and stronger oil production, the report said.

Moreover, the recovery in the oil sector is allowing the government to unwind some of the austerity measures implemented in the wake of the oil price plunge in 2014–2017 and adopt more pro-growth initiatives, it maintained.

That said, downside risks remain large in the Kingdom. Geopolitical issues continue to heighten economic uncertainty, the report added.