Following the rise in inflation in Saudi Arabia, some international organizations are warning about the poverty crisis in the country in the coming years.
According to Saudi Leaks, the Al Saud regime is ignoring the fight against inflation and price increases in Saudi Arabia and its negative effects on Saudi citizens amid severe economic problems.
This issue was raised in the controversial statement of “Ajlan Al-Ajlan”, the head of the Saudi Chamber of Commerce, that the increase in food prices in Saudi Arabia is not exaggerated.
Al-Ajlan stressed that inflation and rising food prices in Saudi Arabia are not exaggerated, and that the increase is due to competition between companies.
The World Bank warned in its forecast for the Saudi economy in 2017: Saudi Arabia is likely to face poverty.
Since then, the bank has emphasized in its 2019 and 2020 visions that official information on poverty in Saudi Arabia is not available; because identifying and supporting low-income families is a challenge.
Inflation in the food sector remains high, probably due in part to quarantines and the public’s willingness to store large quantities of these items, and it is projected that due to the implementation of the VAT increase bill, the inflation rate will remain at the current high level.
Last month, some media outlets reported that the average consumer price index in the largest economy in the Arab world reached 6.2 percent by the end of June, up 0.5 percent from the same period last month and the highest inflation recorded in 11 months.
Among the various sectors, the highest inflation was related to transportation with 22.6%, followed by communications with 13.2% and tobacco with 12.3%. On the other hand, the lowest inflation was related to education with a negative 9.1 percent, followed by water and electricity with a negative 2.3 percent.
Among other sectors, inflation in the food and beverage sector was 8.1 percent and home appliances 7.9 percent.
Saudi Arabia has raised its VAT rate to 15 percent following falling oil prices, declining oil demand and declining government revenues. The Saudi government’s budget deficit has been steadily rising in recent months, and the country’s foreign exchange reserves reached one of the lowest levels in a decade in May.