Here is why inflation in GCC is rising

Muscat: Consumer prices in the GCC countries have jumped by close to 5 per cent in one year on account of the value added tax and selective taxation in Saudi Arabia, United Arab Emirates and Bahrain, according to new data.
Over the 12 months to January 2018, price change for consumer goods and services (excluding housing) in the Gulf Cooperation Council countries rose by 4.9 per cent, according to figures released on Wednesday by GCC-Stat, the Statistical Centre for the Cooperation Council of the Arab Countries of the Gulf.
The biggest increases were for Tobacco 54.6 per cent, Transport 9.9 per cent, Food and Restaurant & Hotels by 5.8 per cent each, Miscellaneous 3.5 per cent, Education 2.8 per cent, Health 2.4 per cent. On the other hand, Clothing and Footwear fell by -1.8 per cent.
In terms of contributions to the 4.9 per cent annual increase, Transport contributed 1.6 percentage points, Food 1.5 percentage points, Tobacco and Restaurant & Hotels 0.5 percentage points each, Miscellaneous 0.3 percentage points, in contrast, the Clothing and Footwear contributed by -0.1 percentage points.
Over the 12 months to January 2018, the country contributions to overall GCC consumer price change were the United Arab Emirates (UAE) 2.5 percentage points, the Kingdom of Saudi Arabia (KSA) 2.0 percentage points, Bahrain, the Sultanate, Qatar and Kuwait contributed 0.1 percentage points each.
This significant rise in the prices of goods and services is due to the implementation of value added tax and selective taxation in the UAE and KSA and selective taxation in the Kingdom of Bahrain, which was agreed by the Committee of Financial and Economic Cooperation of the GCC Finance Ministers on 27 October 2016.
GCC consumer price have increased in January 2018 by 3.6 per cent compared with the previous month.
The most significant price rises during January 2018 were in Tobacco 9.2 per cent, Transport 6.9 per cent, Restaurant & Hotels 4.9 per cent, Food 3.7 per cent, Furnishings 3.4 per cent, Recreation 3.2 per cent and Miscellaneous 2.7 per cent.