Saudi must monitor inflation: IMF

25 Aug 2011

(MENAFN) The International Monetary Fund (IMF) said that since Saudi’s social spending grew and imported food prices surged, the Kingdom should control its inflationary pressures, reported Arabian Business.

The IMF added that rents, imported food prices, high domestic liquidity and government spending could increase inflation to an average of 6 percent, moreover, the country’s real gross domestic product growth would be expected at 6.5 percent due to higher oil revenues resulting from increasing oil output and prices.

It also said that the country should use its oil revenues to tackle social issues like launching housing projects, creating jobs for national and extending the social safety net.

It is worth noting that the agency reduced its forecast for the Kingdom’s fiscal surplus for 2011 from 12.8 of gross domestic product (GDP) to 9.3 percent of GDP.

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