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07 December 2023

Gulf chambers plan conference on inflation

By Agencies


Gulf Arab policymakers and chambers of commerce officials will meet in Bahrain on March 23-24 to discuss how to tackle inflation at near-record peaks, including hearing International Monetary Fund recommendations.

States across the world's biggest oil-exporting region are struggling to contain inflation that hit a 27-year peak of 7 per cent in Saudi Arabia in January and a 19-year high of 9.3 per cent in the United Arab Emirates in 2006.

The conference, entitled "The phenomenon of price rises in Gulf states: causes and future directions", will include speakers from the IMF and European Union, according to the conference agenda, which did not name the officials.

Gulf Cooperation Council (GCC) Secretary-General Abdul-Rahman Al-Attiyah, Bahrain's Industry and Commerce Minister and officials of the Federation of GCC Chambers of Commerce will also attend the conference, the agenda said.

Dollar pegs in all Gulf Arab oil producers but Kuwait restrict their ability to fight inflation by forcing them to shadow US monetary policy when the Federal Reserve is cutting rates to ward off recession.

Gulf economies, by contrast, are surging on a five-fold jump in oil prices since 2002.

Gulf Arab inflation rates would fall "significantly" were the oil producers to sever their links to the dollar and allow their currencies to float freely, former Fed Chairman Alan Greenspan said during a regional visit last month.

The dollar hit record lows against the euro and a basket of major currencies last week. Wall Street dealers unanimously expect the Fed to cut interest rates by at least a half point in March, a Reuters poll showed on Friday.

Many Gulf states have introduced price controls, including food subsidies and caps on rent increases, to offset the impact of price rises on their populations. (Reuters)