Inflation Expected to Generate Major Crises Worldwide

 A woman holding her baby shops at a vegetable market amid the coronavirus disease (COVID-19) pandemic in Cairo, Egypt February 25, 2021. REUTERS/Mohamed Abd El Ghany
A woman holding her baby shops at a vegetable market amid the coronavirus disease (COVID-19) pandemic in Cairo, Egypt February 25, 2021. REUTERS/Mohamed Abd El Ghany
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Inflation Expected to Generate Major Crises Worldwide

 A woman holding her baby shops at a vegetable market amid the coronavirus disease (COVID-19) pandemic in Cairo, Egypt February 25, 2021. REUTERS/Mohamed Abd El Ghany
A woman holding her baby shops at a vegetable market amid the coronavirus disease (COVID-19) pandemic in Cairo, Egypt February 25, 2021. REUTERS/Mohamed Abd El Ghany

With the rise of inflation rates all over the world, the value of the foreign exchange reserves were affected in many countries, putting down the economies of emerging states, which mostly depend on imports to cover their daily consumption needs.

Given the economic developments in many emerging countries, including Egypt, experts told Asharq Al-Awsat that five major crises would result from inflation.

Those include the shortage of the US dollar, the dilemma of maintaining growth and not going into deflation (through attempts to address inflation by raising interest rates while attracting direct investments), and managing financial resources in a way that ensures the continued flow of goods and products, even in the most difficult circumstances, by expanding local production and increasing self-sufficiency in basic commodities, in parallel with long-term import contracts.

Another crisis is represented by the challenge to maintain employment rates, while the fifth pertains to the debt-to-GDP ratio.

Dr. Sheriff Henry, an expert on macroeconomics, believes that inflation “is one of the mechanisms that some countries use to export crises.”

He told Asharq Al-Awsat: “We are now in the time of exporting problems, to exploit them at the geopolitical and economic levels… Crises have become like a snowball since January 2020.”

According to Henry, the inflationary policies would lead to the decline in the countries’ foreign exchange reserves and their inability to provide hard currency to maintain the flow of goods to their markets.

He pointed, however, that the Gulf countries have large reserves, hence, “the effects on them will be minimal.”

For his part, Ahmed Moati, Chief Economist and CEO of VI Markets Egypt, noted that the new crisis was represented by employment, pointing to a change in the behavior of employees in the wake of the coronavirus pandemic.

He also highlighted that major central banks have changed rhetoric in their description of the crisis.

While they used to stress that there was no need to worry as inflation would be temporary, now they are increasingly mentioning a “huge and frightening inflation,” according to Moati.

For Ahmed Shukri Rashad, a university professor and economic advisor, inflation is likely to remain high in 2022 in developed and developing countries, to start receding in 2023 in light of contractionary monetary policies and a breakthrough in the supply chain crisis.



Saudi Arabia, Russia Seek to Deepen Economic and Industrial Ties

The Saudi and Russian ministers discuss means to promote mutual cooperation. (Saudi Ministry of Industry)
The Saudi and Russian ministers discuss means to promote mutual cooperation. (Saudi Ministry of Industry)
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Saudi Arabia, Russia Seek to Deepen Economic and Industrial Ties

The Saudi and Russian ministers discuss means to promote mutual cooperation. (Saudi Ministry of Industry)
The Saudi and Russian ministers discuss means to promote mutual cooperation. (Saudi Ministry of Industry)

Saudi Arabia and Russia have stepped up efforts to strengthen their economic and industrial partnerships, as Minister of Industry and Mineral Resources Bandar Al-Khorayef led a high-level Saudi delegation to the INNOPROM 2025 International Industrial Exhibition in Yekaterinburg, Russia.

Opening the Saudi pavilion - where the Kingdom is participating as the exhibition’s partner country - Al-Khorayef underscored more than a century of strategic relations and robust economic ties that, he said, form the basis for expanding trade, investment, and cooperation in key sectors including mining, manufacturing, and technology.

The Saudi delegation includes officials from 18 government entities and 20 leading companies spanning industrial services, automation, machinery, metals, energy, and advanced manufacturing.

The pavilion is showcasing the Kingdom’s competitive advantages as an investment hub, along with opportunities identified in Saudi Arabia’s National Industrial Strategy.

Promotional events highlighted financial incentives, including funding solutions from the Saudi Industrial Development Fund and the Saudi EXIM Bank, as well as Saudi Arabia’s rapidly developing infrastructure, industrial cities, special economic zones, and specialized complexes aimed at supporting investors.

During the exhibition, Al-Khorayef and Russian Minister of Industry and Trade Anton Alikhanov met to discuss ways to deepen cooperation. Both ministers stressed the importance of enabling the private sector to seize emerging investment opportunities, and pledged to support joint initiatives that drive industrial development in both countries.

The Saudi minister noted Riyadh’s strong interest in Russian expertise across priority sectors such as heavy equipment, agricultural machinery, chemicals, automotive, and advanced manufacturing technologies. Talks also focused on forging investment partnerships that facilitate knowledge transfer, industrial innovation, and technology localization.

The two sides reaffirmed their commitment to boosting non-oil exports and simplifying market access, aiming to diversify their economies and enhance trade flows.

Saudi Arabia’s participation in the exhibition, officials said, reflects its strategy to build international partnerships that reinforce its standing as a trusted global economic partner.

Recent years have seen steady growth in Saudi-Russian economic ties. Non-oil trade rose from $491 million in 2016 to $3.28 billion in 2024, driven by expanding cooperation in mining, petrochemicals, and advanced industries.

The Kingdom hopes to attract high-value Russian investments, strengthen industrial supply chains, and further develop local capabilities as part of its push for economic diversification and sustainable growth.