DUBAI: Saudi Arabia expects its economy will grow by 3.2% in 2021, recovering from the projected 3.7% contraction this year when the kingdom's economy was hit by the coronavirus pandemic and lower oil prices, according to a budget statement.

Inflation was seen at 2.9% in 2021, compared with projected inflation of 3.7% for 2020, as the kingdom hiked the value added tax (VAT) from 5% to 15% last July, the Ministry of Finance said in a budget statement.