The quietly brewing storm: the bite of inflation in the Gulf countries

Sep 6, 2022 | Publications

Stormy clouds brewing

Who says the land of oil doesn’t have inflation? My fuel cost has increased almost 130%. I’m not kidding!”@ayeshatariq__. Jul 14th 2022

https://twitter.com/ayeshatariq__/status/1547474693090942976

Against the backdrop of a post COVID-19 economic downturn and pending recession, many developed markets are feeling the bite of rampant inflation. Global fuel price rises have raised the price of transportation, imports, and thus everyday goods.

Many developing and developed markets across the world are struggling with the cost of everyday living essentials, from heating and cooling, to food bills, petrol, building supplies and labour costs.

The gulf markets in contrast, have been somewhat immune to the effects of the global downturn so far. As major exporters of petroleum products such as oil, gas and fuel, these markets have been able to maximise on the shift of fuel supplies away from Russia and thus the consequential increasing cost to supply oil.

As a consequence, many cities throughout the gulf region are no longer in the top 100 most expensive cities for expats this year. This is largely driven by other nations being hit harder.

Whilst the rise in concern appears slower and less significant than other developed nations, cost-of-living related concerns have increased significantly over the last 3 months.

The number of mentioned showing concern for the cost-of-living over time. Including terms such as ‘inflation’, ‘can’t afford’, ‘expensive’, ‘fuel prices’ or ‘rising costs’ etc. (sampled data 01.01.22 – 17.07.22)

Here we use data and techniques from Quantum Digital Listening to explore how the global cost-of-living crisis is playing out across the region and the impact the crisis may be having on consumer sentiment and activities.

Background and cultural context

It’s important to understand the cultural context of the region’s historical relationship with wealth and poverty. In a region where excess wealth is seen as the norm and frequently showcased, calling out financial crises, hardship or concerns is rare.

However, there are exceptions. Whilst grievances regarding your own personal situation are rarely raised or projected to appear self-serving, concern can be shown for others; for the greater good of the wider community, for those less fortunate than oneself, albeit without personally offering any form of financial assistance.

“Ten years ago, you enter the hypermarket, you spend a month’s right, you reach a thousand riyals, and the bills for petrol and electricity reach a thousand, and you fill your refrigerator with meat, which costs a thousand now, everything is three times!! Inflation, taxes and high prices break the back of low-income people #الراتب” @zoro1__. Jun 10th 2022.

Top regional concerns

Comparing the cost-of-living related concerns of consumers in the USA, a major economy grappling with inflation, with the gulf states, shows their worries fall in the same order of concern. Interestingly, the volume of fuel price concerns is significantly (over 5%) higher in the Gulf states, despite being major oil producers.

Read More  How much money you should have saved
Top cost-of-living related concerns of consumers within the GULF states VS USA (01.03.22 – 24.07.22)

Fuel price rises have catalysed international political posturing

Given their status amongst the world’s top oil producing nations, fuel prices including petrol, oil and gas, are unexpectedly one of the top concerns within these markets

With price rises in excess of 80% across some nations, global politics has been blamed for pushing domestic prices up.

“The result of oil shortage in the world today is a result of yesterday’s politicians, not Saudi Arabia.”

@AbuTurki_2020. Jun 5th 2022

http://twitter.com/AbuTurki_2020/statuses/1533446664790462464

Price rises have got in the way of important cultural & religious practices

“Why’s hajj so expensive ??” @mahagulnaaz. Jul 4th 2022

Inflation has not only begun to cause price rises on basic goods and local services, but on the most important cultural and religious events.

‘Extortionate’ price rises for attendance packages have priced many worshipers out of attending the most important religious events in the Islamic calendar, and for some their lives; Hajj and Umrah.

2022 saw a large number of worshipers priced out of attendance, having been forced to miss attending in 2020-21 due to restrictions imposed during the COVID-19 pandemic.

“His Royal Highness @KingSalman Local Haj for expatriates is very expensive. Please direct @MoHU_En to reduce the prices for hajj.” @engfahadsabir. Jun 6th 2022

http://twitter.com/engfahadsabir/statuses/1533755125617016832

Despite the quiet crises, there is still room for humour, albeit weaponised

The regions online commentary on the crisis has left some space for moments of humour to shine through. The number of mentions referring to expense or cost and incorporating humours emojis has increased for the same period in 2022 over 2021.

Online mentions referring to expense or cost and incorporating the following emojis  😆 🤭 😹 😂 🤣 😜 😝 🙊  (Jan – July 2021 vs 2022)

“Okay inflation is real. My barber just raised his prices by 12% and reduced his chat by 20%. Mental health is expensive.” @Azhan_backer. Jun 14th 2022

The longer-term impact remains unpredictable

Whilst the beginnings of a cultural shift may be brewing, only time will tell what extent the crisis will be further brought into the spotlight across the region, and what impact it will have on the everyday livelihoods of residents.

Methodology

Research for this article was undertaken using digital & social media scans provided by Quantum’s Digital Listening team.

Digital Listening (aka Social Listening) finds relevant consumer commentary and conversations from a wide variety of online sources including social media platforms, blogs and forums. We analyse this data to identify conversation themes, sentiment, product/brand feedback, and other topics of interest.

This helps us gather online behaviour trends and themes of consumer opinion from a wider audience than traditional research allows for, giving our insights a quantitative backing.

In this article, we have analysed online mentions that include keywords that are related to inflation, cost-of-living, and other price related crises in the following markets: Saudi Arabia, United Arab Emirates, Oman, Kuwait, Qatar.

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