JEDDAH: Prices of consumer goods including foodstuffs in the Kingdom are expected to go down 30 percent within the next three months as a result of a worldwide recession and the fall in oil prices. An analysis in Al-Riyadh Arabic daily said prices of goods imported from Europe, Australia and other parts of the world would decline because of rising exchange rate of the US dollar. The currencies of Saudi Arabia and other GCC countries, except Kuwait , are pegged to the US dollar.
Yousuf Al-Qafari, CEO of Abdullah Al-Othaim Markets Company, said he expected prices of all commodities, including rice, would fall by 30 percent. “We’ll see substantial reductions in prices within the next three months,” he added. Al-Qafari attributed the fall in prices to a reduction in the cost of transportation and insurance as a result of a decline in oil prices.
Al-Qafari said the continuous increase in prices of essential commodities had resulted in rising inflation to record levels of nearly 11 percent in August 2008.
The Arabic daily said a fear of worldwide recession would encourage importers and traders to empty their stocks by cutting prices in order to avoid losses.
Abdullah bin Suleiman Al-Robaian, an industrialist, said the prices of primary goods imported from foreign countries had gone down 20 to 40 percent. “This will have a positive impact on prices of national commodities,” he added.
Al-Robaian, who is chairman of a food manufacturing company, said many Saudi industries were facing problems due to a lack of funds and a decline in exports