JEDDAH: Major events including the COVID-19 pandemic and war in Ukraine have caused price hikes around the world, Saudi Minister of Commerce Majid Al-Qasabi said in a periodic government communication conference on Tuesday.
The press conference discussed four key areas: Global events that led to price increases, the Saudi leadership’s guidance to address the effects of the hikes, repercussions of global events on prices, as well as a question and answer segment.
“Let us rewind two years and a half back to February 2020. The COVID-19 pandemic was an economic, social and mental tsunami. It was the biggest economic crisis in the world,” Al-Qasabi said.
“This pandemic affected the whole world all at once, and suddenly without any warning. We are still suffering from its effects,” he added.
“We stayed in the pandemic for 13 months, and after that, it was the beginning of recovery.”
After 13 months — specifically March 2021 — there were growing signs of economic recovery, Al-Qasabi said, but warning that there was an increase in demand versus supply.
“The demand was more than the supply, and this causes an imbalance in the market, when the demand exceeds the supply. Of course, the result will be that prices have risen,” he added.
Al-Qasabi pointed to the Suez Canal obstruction in March 2021 as another event that added to global economic woes.
“We saw the blockage of the navigational movement and the cessation of the navigational movement in the Suez Canal, then after three months — in July 2021 — the second variant of the virus appeared and imposed a curfew again, which caused the closure of some ports and some cities,” he said.
In February 2022, the Russia-Ukraine conflict began. The minister said that the war affected transportation, too.
“We had a crisis between Russia and Ukraine, and we still do not know how long this crisis will last. These events combined, overlapped and completed, leading to a crisis in transportation and supply chains,” he said.
The transportation and supply chain crisis includes the disruption of some transportation ports, such as the main port of Shanghai, a sixfold increase in the cost of transportation, as well as surging freight insurance rates.
Al-Qasabi hailed King Salman’s royal order on Monday that approved the allocation of SR20 billion ($5.32 billion) to help citizens mitigate the impacts of rising global prices.
Half of the allocated money will go to social insurance beneficiaries and the Citizen Account Program.