Thinking as an economist, as the country economy witness booming, which is happening in the GSS countries, and the income increases, the inflation rate will go up. Away from the emotions; raising the base salaries is not a wise solution to the current inflation problem, it certainly will escalate the inflation rate especially in the absence of credible control.
We in the GCC do not have credible and experienced central banks that can respond effectively to the economy shocks. Because the Riyal is pegged to the US $, the government monetary policies have to follow the US central banks and focus on maintaining a fixed exchange rate. GCC countries do not have a lot of flexibility on what they can do about the inflation, and all the available solutions now have their risks. So which way to go --- revaluing the Riyal against the Dollar --- then what if the dollar decline again! De-pegging from the $ and using a basket of currencies --- but all of the major currencies are highly appreciated ( at their peak) , look at the Euro and the pound sterling. This issue requires an overall review of the internal and external economy structure.
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