Saudi Arabia will spend more than $5 billion on social security payments and accumulating strategic reserves as the oil-rich kingdom feels the bite of global inflation.
Saudi Arabia has done relatively well at managing inflation, with consumer prices up 2.2 percent over the past month, but Saudis are beginning to feel the impact of rising prices.
The royal court channeled about $2.8 billion in direct disbursements to people enrolled in Social Security and to the Citizens Account, a basic income program, the statement said.
The rest will be used for “strengthening strategic reserves of basic commodities,” the official state news agency reported on Monday.
The decision came after an economics committee headed by Crown Prince Mohammed bin Salman, the country’s day-to-day ruler, who oversees the country’s economic reforms, conducted a study into global prices and their potential impact on Saudis, the statement said .
Saudi Arabia, the world’s largest oil exporter, has traditionally linked crude oil price volatility to government spending. It has been a key beneficiary of high oil prices this year.
But after posting a $15 billion surplus in the first quarter of this year, the Treasury Secretary said the government intends to use the money to bolster its wealth fund and shore up state reserves while it presses ahead with plans to increase its to shake up the oil-dependent economy.
The country’s foreign exchange reserves have fallen to US$453 billion from a peak of US$700 billion in 2014. It also has about SR338 billion (US$90.1 billion) in local currency reserves.
Live news updates: South Korea consumer prices rise at fastest rate since 1998 Source link Live news updates: South Korea consumer prices rise at fastest rate since 1998