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Saudi Arabia will spend more than $ 5 billion on social security payments and support strategic reserves, as the oil-rich kingdom feels the brunt of global inflation.
Saudi Arabia has done relatively well in dealing with inflation, with consumer prices rising by 2.2 per cent last month, but Saudi Arabia has begun to feel the effects of rising prices.
The royal court directed around $ 2.8 billion in direct payments to people registered with social security and to Citizens Account, a basic income program, the statement said.
The rest will be allocated to “support strategic reserves of basic commodities”[ads1];, the official state news agency reported on Monday.
Muslim pilgrims shop at a market in the holy city of Mecca in Saudi Arabia on Monday © AFP via Getty Images
The decision came after an economic committee led by Crown Prince Mohammed bin Salman, the country’s daily ruler overseeing the country’s economic reforms, conducted a study on global prices and their possible impact on the Saudi authorities, the statement said.
Saudi Arabia, the world’s largest oil exporter, has traditionally linked the volatility of crude oil prices to government spending. It has been one of the main recipients of high oil prices this year.
But after announcing a $ 15 billion profit in the first quarter of this year, the finance minister said the government intended to use the money to strengthen the wealth fund and support government reserves, while plowing ahead with plans to shake up its oil-dependent economy . .
The country’s foreign reserves have fallen to $ 453 billion, down from a peak of $ 700 billion in 2014. It also has around 338 billion SR ($ 90.1 billion) in local foreign exchange reserves.
