Rising inflation to hit economy hard

A prominent Saudi economist has warned against creeping inflation in the country, saying its continuation would have dire consequences on the economy in the long run.
“Inflation is one of the main issues that concerns economic, political and social organizations because of its negative impact,” said Khaled Al-Bassam of King Abdulaziz University and economic adviser at Jeddah Chamber of Commerce and Industry.
He suggested removal of certain taxes, slashing of electricity prices, subsidizing essential goods like milk and medicine and raising the riyal value against US dollar to reduce the impact of inflation on citizens and residents.
“Ours is an open economy and there are no restrictions on the movement of goods and wealth. Moreover, locally manufactured products are limited and we depend mainly on imported goods,” he said.
Al-Bassam said inflation would reduce the purchasing power of Saudi riyal and cut short savings and investments. “It will also weaken the Kingdom’s investment climate and increase prices of locally-made goods.”