Monday, May 16, 2011

Inflation on the Rise in Saudi Arabia

It was just last month when we went out for our big monthly shopping that I had the impression that prices had gone up again. If you live in Jeddah and are very observant, you must have noticed this too.

To the average expatriate family who lives in Saudi Arabia, it is difficult to make ends meet with this slight increase in the cost of living. It is even harder when the family has children of schooling age in their household. A typical average expatriate family has a yearly income of about 72,000-96,000 SAR (local source) which is just enough to survive during these hard times.

Transportation is another issue too. I hire a driver to take me around as my husband is out of the town nearly all the time. Within the last 3 weeks I changed 3 drivers. Know why? They were asking for more pay and were arguing that the cost of living had increased. Waoh! I have to endorse this? 

It does not end there. We are having another landlord. This is the third one we would be having in 3 years. The owners of our building just keep changing and each new one comes with an increase in rents and a new policy to pay electric bills. 

The increase in the cost of living can be felt by us all. Even the little guy who goes to school would notice that what he had the habit of buying at 1 SAR now costs 1.5 SAR. International economy analysts are predicting that the prices would rise again during the forthcoming months. According to the Arab News, John Sfakianasi, chief economist at the Banque Saudi Fransi in Riyadh, said, "Inflation seems to be on a gradual yet increasing path. The downward base effects are now winding up and headline inflation will be more accentuated."

We should expect more as we get closer to the Ramadan when the prices of basic commodities reach their highest. Disturbances in the country's political system with increasing demands of women's rights, elections, and the release of some prisoners might even make the condition more.

We hope for the best even when we expect the worst. Whatever be the case, we have to be financially prepared for the coming months.

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