Saudis shop for jewellery at Riyadh's Taiba gold market on Monday, two days ahead of the hike. AFP/FAYEZ NURELDINE
The hike could stir public resentment as it weighs on household incomes, pushing up inflation and depressing consumer spending as the kingdom emerges from a three-month coronavirus lockdown. The austerity push underscores how Saudi Arabia’s once-lavish spending is becoming a thing of the past, with the erosion of the welfare system leaving a mostly young population to cope with reduced incomes and a lifestyle downgrade.
A gold shop in Riyadh told AFP it saw a 70 percent jump in sales in recent weeks, while a car dealership saw them tick up by 15 percent. “The government ended the country’s lockdown and there are signs that economic activity has started to recover,” Capital Economics said in a report.Saudi Arabia’s finances have also taken a battering as coronavirus forces authorities to massively scale back the annual pilgrimage to Islamic holy sites in Mecca. AFP/File/STR
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