Saudi to hand out billions to ease inflation pain

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

FILE: A handout picture released by the Jordanian Royal Palace shows Saudi Crown Prince Mohammed bin Salman smiling after receiving al-Hussein bin Ali medal, the highest civilian medal in Jordan awarded to heads of state and royalty, at al-Husseiniya Palace in the capital Amman on 21 June 2022. Yousef ALLAN / Jordanian Royal Palace / AFP

RIYADH - Saudi Arabia announced Monday 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, 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 Monday, 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.

Chairing a meeting of the kingdom's economic affairs council, Prince Mohammed, the de facto ruler, reportedly made the point that government offices must respond to global supply chain issues and rising prices to protect consumers' interests.

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% in May, with prices up 4.2 % for food and beverages and 4% for transport.

Nevertheless, the kingdom's tightly controlled social media landscape has featured more frequent griping about rising prices in recent weeks, including Twitter hashtags calling for a boycott of eggs and a well-known dairy company.

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% 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% 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.