Saudi Economy Takes a Hit From VAT

Saudi Arabia’s economy is already feeling the effects of VAT judging by The Emirates NBD Purchasing Managers’ Index.

The Index fell from 57.3 (index from December) to 53 (last month), the lowest reading in the survey’s history, as production and new orders slowed. Companies had boosted output and purchasing at the end of last year, ahead of the new tax, meaning the slowdown “is likely to be transitory,” Khatija Haque, head of the Middle East and North Africa research at Emirates NBD, wrote in the report.

A measure of business activity in Saudi Arabia’s non-oil economy dropped sharply to a record low in January, as the implementation of a new value-added tax hit output and purchasing. The Emirates NBD Purchasing Managers’ Index fell from 57.3 in December to 53, the lowest reading in the survey’s history, as production and new orders […]

Source: Saudi Economy Takes a Hit From VAT – Bloomberg Businessweek Middle East