Saudi Subsidies Should Ease Inflation In the Long Term – Minister Assaf

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Saudi Minister Ibrahim  Al Assaf said that the subsidies launched by the King Abdullah stimulus would ease inflation in the long term by boosting supply in the housing sector, MENAFN reports.

Inflation hit 5.3 percent in Saudi Arabia in 2010 in Saudi Arabia, according to Emirates 24/7’s Nadim Kawach. The report noted that a surge in rent costs was to blame for the increase in inflation – rents for housing rose nearly 9.5 percent in 2010.

But overall, “Saudi Arabia’s annual inflation rate fell for the sixth month in a row” in March, according to the USSABC, “to 4.9 percent in February, down from 5.3 percent in January, marking the first time inflation has been below five percent since April 2010.”

And with the King’s so-called stimulus, which includes both the construction of up to 500,000 residential units and a mortgage law that should increase the ability of Saudis to borrow money to purchase property, the improved situation may indeed reduce inflation in the long term.