Inflation in the Gulf: the dire clear and disagreement about the reasons
The CNN
Thursday, 26 June 2008 Thursday, 26 June 2008
Continue messing around causes massive inflation in the Gulf region and its implications, especially as he started causing erosion of local levels of growth, has increased disagreement on the real phenomenon, which he repeated some of the currencies of the region linked to the dollar Staggerer, while others insisted that they related to domestic factors, in the forefront Real estate prices and food.
Has not forgotten the role of experts from the minds of the enormous financial flows that feed the Gulf states due to high oil prices increase in indicators of inflation, but they dismissed the injury situation of the region's economy "inflationary recession" because of reduced growth and continued high prices.
" He said Marius Marathiftis, research director of the Middle East to Standard Chartered in an interview with CNN: "with increasing indications weakness of the U.S. economy and the increasing pressure on the dollar shows the impact on the region with the devaluation of local currencies and this problem directly linked to rising inflation."
. By contrast, the IMF vision for file demonstrator reasons for the high real estate prices and housing and food, during the intervention by Mohsin Khan, regional director of the IMF last May in Dubai to offer the Fund's vision to the situation in the region has emerged a clear focus on these factors.
" Khan said: "There is the impact of food prices, according to the index basket, which prepared, we saw that prices were rising normally, but starting in 2007, there was a price jump because of high demand and supply stability."
." Khan also pointed to the role of liquidity due to high oil revenues in the high inflation, saying: "If oil prices reached 200 dollars per barrel or even $ 150 during this year, this will prompt a lot of money to the Gulf producing states, and if this happened it would yearn to see the levels of inflation which People complain about them now. "
". He dismissed expert international situation improves in the Gulf unless it addresses the real estate side, saying: "pending plans to move about real estate prices and rental values Inflation will remain at record levels."
". But the surprise came dismissing any impact of currencies in the region linked to the dollar on inflation through its emphasis on studies conducted by the Fund: "revealed the presence of influence, but not big and can not be compared to the impact of housing prices and food."
The local experts on what is stated in touching Khan, for reasons of inflation, said Ahmed Shawl, Chairman of the Finance Bank in Dubai in an interview with CNN site in Arabic that studies conducted locally also show real responsibility for a minimum of 60 per cent of the total indicator of inflation.
Asked about the potential exposure of the region's economy to a case of "inflationary recession" by the continued rise in prices with the stagnation or decline of growth impact of global conditions Chal view that scenario possible in theory, but practically ruled out, given the continuing financial flows to the region.
". The views of some of Khan had summoned an official response from the UAE, especially in terms of his warning that the imposition of VAT will be inflation at nearly 2 per cent, Dubai Customs hastened to issue a statement, which denied that the health and said that the tax "will enhance the national economy," and that Applied in the UAE in particular, and in the Gulf region in general, "will have an effective impact in raising the standard of living."
;". He said Abdul Rahman Al Saleh, Executive Director of the institutional support of Dubai Customs that the transfer of the International Monetary Fund that the application of VAT in the UAE and the Gulf states at this time will increase the inflation rate to reach 2 per cent, is "Building On speculation. "
By contrast, the company issued a "proud religion" before the real economic report, which she said that fuels "contribute one third levels of inflation," and that with the spread of loans increased 12.5 billion dirhams within a year.
" Akbar said Fakhreddin, the chairman of the company that three points core inflation rose to its highest level since 1990, when 12 per was "unprecedented rise in the prices of real estate and rental housing units, in addition to some banks raising the ceiling for consumer loans About 25 times the average salary terms will contribute to pump more liquidity into the market the highest level of inflation. "
". He added: "We also believe that the escalation of prices of fuels - not at the Emirates but at the international level - contributing to 36 per cent of inflation in the economy Emirati result of direct impact on production processes in the energy sector, transport and construction."
He called Fakhreddin, which his company is one of the largest real estate development companies in the country to control the escalation of rents through the development of more housing projects, Msttrda market will prove that with the introduction of new units within 3 to 5 years.
The loans, Fakhreddin expectations that the central bank has identified the roof, after increased in one year almost 12.5 billion, including easing the flow of liquidity in the market, while fuel sector should be supported to contribute to the development process by reducing production costs, especially that the state owns Like all other ingredients support the Gulf states.
