Price increases in the Kingdom can be blamed on poor financial controls and greed of merchants, according to experts. Fadl Abu Alenain, a financial and economic adviser, said it is likely prices will increase if current circumstances persist. Prices are up because of four main reasons: global price hikes, government's expansionary fiscal policy, a weaker riyal and poor monitoring of markets. “However, the effect of global prices is not huge. The price rise in the Kingdom is double the global rate,” he said. He said that there is “price chaos” in the Kingdom. The problem is that people are blaming each other. Financial policy officials blame those managing monetary policy and the other way around. In the meantime, the ordinary citizen, whose living is most affected by the price hikes, blames all parties. Dr. Habeebullah Turkustani, Economics and Marketing professor at King Abdulaziz University, said the lower value of the riyal as opposed to other international currencies, in addition to the poor “alternative product” culture of consumers, has led to higher prices and rising inflation domestically. He said higher global prices cannot be blamed because increases in Saudi Arabia are far higher than the global average. He wondered how a dairy company, that had published a report showing an increase in profits during the first quarter of this year, could announce a product price rise last week. “Some greedy companies make profits and seek to raise prices at the same time. Where is their social responsibility?” he said. He said there must be greater controls introduced to prevent some companies from making excuses to exploit “purchasing power” seasons like Ramadan and a rise in people's incomes. They seek to increase their profits at the expense of people not benefiting from any increase in their incomes, he said. He said these companies are making the consumers bear the impact of higher global prices, the weaker riyal and higher shop rents. He urged Saudi consumers to start developing a habit of buying alternative products because this would force traders and manufacturers to reduce the prices of their high-priced products to remain competitive in the market. __
