Saudi to hand out billions to ease inflation pain

RIYADH

Saudi Arabia has announced it was disbursing billions of dollars directly to citizens to ease the effects of inflation amid growing online expressions of frustration over rising prices.    

“A generous royal order was issued approving the allocation of financial support in the amount of 20 billion riyals (around $5.3 billion) to face the repercussions of rising prices globally,” the official Saudi Press Agency reported on July 4, attributing the decision to King Salman.  

Roughly half that amount would come via direct cash transfers to social security beneficiaries, the SPA report said.     

Earlier on July 4, Crown Prince Mohammed bin Salman “stressed the need to take into account the neediest citizens in the face of international developments that resulted in rising costs of some basic needs”, a separate SPA report said.         

Saudi Arabia, the world’s top oil exporter, has not been hit as hard by inflation as other countries in the region.     

The most recent consumer price index for Saudi Arabia showed an annual increase of 2.2 percent in May, with prices up 4.2 percent for food and beverages and four percent for transport.    

Saudi Arabia’s economy has generally performed well this year, especially since Russia’s invasion of Ukraine sent energy prices soaring.     

GDP is expected to grow by 7.6 percent in 2022, the International Monetary Fund said in April.     

In early May, the Gulf monarchy reported its fastest economic growth rate in a decade, as a surging oil sector fuelled a 9.6 percent rise in the first quarter over the same period of 2021.  

Saudi Arabia’s announcement came as the United Arab Emirates similarly said it was doubling the budget for its social security programme to 28 billion dirhams (about $7.6 billion) after a rise in fuel prices.