A cap on the domestic price of gasoline when crude oil passed $70 a barrel helped to insulate Saudi Arabia from the danger of inflation, the Kingdom’s finance minister said on Monday.
Inflation in Saudi Arabia was 1.6 percent at the end of March and is expected to be no higher that 2.3 percent by the end of the year, Mohammed Al-Jadaan said. Many Western economies are nearing double-digit inflation, partly driven by domestic energy costs.
“It was the end of last year we froze the price escalation of gasoline for the internal economy and households at $70. So anything above $70, the economy will not feel that heat,” Al-Jadaan told a panel at the World Economic Forum in Davos.
The minister said the economic outlook for the Middle East and North Africa region was generally positive, but geopolitical challenges such as the war in Ukraine were putting pressure on food prices. “In this particular area, let us remember that the MENA region is a significant importer of wheat,” he said.
“If you look at just some basic figures, we represent about 6 percent of the world’s population, and the World Bank is saying 20 percent of the world’s potential starvation will be in MENA.”