Saudi inflation rose to 6.2% y/y in June but it will fall sharply in July to around 1.0 y/y as the effects of last year’s VAT hike fall out of the annual price comparison. Inflation is likely to hover around 1.0-1.5% y/y over the rest of this year and in 2022-23, although the possibility of VAT cut presents a downside risk.
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