Saudi Arabia on Monday announced it was providing 20 billion riyal (US$5.3 billion) directly to citizens in a bid to mitigate the impacts of inflation and rising prices.
King Salman bin Abdulaziz Al Saud by royal decree approved the allocation of 20 billion riyal in financial support “to protect the beneficiary families from the repercussions of the effects of global price hikes,” Saudi Press Agency (SPA) reported.
The decree came in light of a study by the Council of Economic Affairs, which is chaired by Crown Prince Mohammed bin Salman bin Abdulaziz.
“A Royal Decree was issued approving the allocation of SR20 billion as a financial support to confront the repercussions of rising prices globally,” SPA reported.
Around half of it will be distributed as direct cash transfers to citizens, with allocations to the Citizen Account Program and the Small Livestock Breeders Support Program.
The royal decree came on the same day Prince Mohammed chaired a meeting of the Council of Economic Affairs at Al-Salam Palace in Jeddah.
The prince “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,” SPA reported.
Consumer Price Increases
Saudi Arabia’s latest consumer price index (CPI) for May showed an increase of 2.2 percent compared to May 2021. This was slightly below April’s inflation rate of 2.3 percent, according to official figures (pdf).The main driver of CPI inflation in May were the higher prices of food and beverages (up 4.2 percent) and transport (up 4 percent).
The cost of meat was the biggest factor in higher food prices in May. Food and beverages has relatively high importance in the consumer basket for Saudis with a weighting of 18.8 percent.
The cost of transport, education, hotels, and restaurants also saw increases. Most higher prices were driven by the increase in food costs.
A 2.1 percent increase in personal goods and services was mostly driven by the 17.2 percent rise in price for wedding hall rentals.
Prince Mohammed said there was a need to monitor markets, the availability of products, and price levels, as well as to protect fair competition and combat “monopolistic practices that affect legitimate competition or the interest of the consumer.”
