Financial Wellness In An Inflationary Market Part-II: Middle East and KSA

Middle East and Saudi Arabia is on focus of world because of its fastest economy growth, Mega Projects, and broad vision to cater the world in balanced economic environment. In line with Vision 2030 of Saudi Arabia, Saudi market is fostering a favorable environment in KSA for all industries growth, especially for its ambitious agenda of development of mega cities like NEOM and other projects for big cities to recognize as Top Ten cities in the world.

We can’t ignore inflation and its impact on the economy in the context of financial well-being, even in growing market, we need to take appropriate actions to prevent from its impact. Inflation is the sustained increase in the general price level of goods and services in an economy over a period. In simpler terms, it means that, on average, things become more expensive, and each unit of currency (e.g., Dirham, Saudi Riyal, dollar, pounds, and euro) buys less than it used to.

Inflation can be caused by various factors, including:

• Demand-Pull Inflation: When demand for goods and services exceeds their supply, prices tend to rise.
• Cost-Push Inflation: When the cost of production, such as wages or raw materials, increases, businesses may raise prices to maintain profit margins.
• Monetary Policy: Central banks can influence inflation through their control of interest rates and the money supply.

Financial well-being refers to a state in which an individual or household enjoys a sense of financial security and stability. It is characterized by having enough financial resources to meet current needs, plan, and navigate unexpected financial challenges without significant stress or hardship.

Financial security is a key component of financial well-being. It involves having a financial safety net that can cover essential expenses and protect against financial emergencies. Financial security provides peace of mind and reduces anxiety related to money matters. Without financial security, individuals and families may struggle to meet their basic needs and long-term goals.                                              

Challenges in an Inflationary Market

• Erosion of purchasing power.
• Impacts on Savings and Investments.
• Rising Cost of Living.
• Uncertainty and volatility make it difficult for business to plan and invest.
• Reduced Economics growth, business and consumers become more cautious about spending.  

Insurance definition and recommendation in the context of financial well-being

Insurance can play a vital role in helping people to achieve financial well-being. It can provide financial protection in unexpected events, such as car accidents, medical emergencies, or property damage. Insurance is a financial product or arrangement that provides protection against financial losses or risks. Individuals and organizations pay premiums to insurance companies in exchange for coverage in case of specific events or losses. Moreover, inflation-indexed policies or investment-linked insurance can help policyholders maintain their financial well-being in an inflationary market.

Associated Alliance role in Middle East and Kingdom of Saudi Arabia

Associated Alliance served around the globe with the help of international partners to bring diversified insurance solutions and consultancy to Middle East and Kingdom of Saudi Arabia. We as insurance expert cover Middle East and KSA market with broad vision of consultancy on all mega projects especially General lines, Medical, Motor, power, transportation, aviation, seaport management insurance and many other lines. Our expert team specially in Arabian Peninsula is ready to serve any query.