The tighter monetary policy from Federal Reserve and the continued raising of interest rate will have an impact in the GCC, according to Simon Ballard, chief economist of First Abu Dhabi Bank.
“Yes, inflation has risen here in the GCC and the UAE by half a percent to 2.5 percent. But it is still way short of 7 percent in the UK,” he said on the sidelines of the recently held TOP CEO Conference and Awards in Dubai.
Ballard said that inflation is coming from external locations and that it is not a domestically driven level of inflation.
“In the short term, I guess the GCC governments will need to address the underlying levels of spending support for consumer through continued stimulus and support packages,” said Ballard.
He believes it more of an external driver of inflation rather than something that can be dealt with directly here at the GCC level.