08/20/2008, 00.00
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Inflation could take the shine off Ramadan festivities

Food prices have jumped by up to 100 per cent over last year with the poor and wage earners as the most affected. Families are preparing more frugal iftars. Governments appeal for lower prices during the holy month; analysts blame the pegging of local currencies to the US dollar for high inflation.
Jeddah (AsiaNews) – Governments and local chambers of commerce in Gulf states are worried about the effect of inflation on their economies and how that is impacting on Ramadan traditions.

Ramadan is a month-long period of daytime fasting; this year it will run from 1 to 30 September. From sunrise to sunset believers will not be able to drink or eat—not even swallow their own saliva. Once the sun is down each household will hold a large meal called iftar during which friends, relatives and the poor are invited.

This year because of inflation many people are planning leaner iftars with fewer invitations because the price of victuals like rice, oil, wheat flour, lentils have all shot up by more than 100 per cent.

The most affected are the families of wage earners from India, Bangladesh, Pakistan and the Philippines who must prepare more frugal iftars. Many low-wage earners will likely miss out on invitations to free meals.

Governments and economics ministries have appealed to merchants to cut food prices during the month of Ramadan, or at least not raise them over and above last year’s.

A windfall of record-high oil revenues has provided Gulf countries with large fiscal surpluses, allowed them to reduce their public debt and boost their foreign exchange reserves. But inflation has been higher than usual, exceptionally in Qatar and the United Arab Emirates, at 13.76 and 11.1 per cent in 2007, respectively.

For various analysts the problem lies with the fact that Gulf currencies (except for Kuwait’s) are pegged to the US dollar.

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