Unprecedented inflation that occurs in most countries of the world and at different rates, as it is known for several reasons, most notably the Corona crisis, the way countries deal with the pandemic, and focus on the health aspect at the expense of the economic aspect, and the other reason is the Ukrainian-Russian war, which resulted in a severe global shortage in supply. And the inability of countries to provide alternatives or fill this shortage, and for individuals the obsession with wanting to buy all kinds of goods, and the low interest rate in the past period encouraged borrowing.
All of these and other factors led to the global problem, known as inflation. Several steps had to be taken to address inflation, the first of which was to raise the interest rate whose effects appeared from the early days. And gold, clear indications of the impact of raising interest rates.
Certainly, stopping borrowing for projects or buying real estate is another reaction that helps in declining prices and a preliminary treatment for inflation in real estate prices.
Also, the decline in the number of deals in the first half of 2022, and the reluctance of the investor and buyer to buy during this period, are helping factors to address inflation. But the high interest rate for a long period makes us between the rock and the anvil, between the hammer of inflation and the anvil of economic stagnation if the interest rate rise continues for a long period, and there must be treatments and the use of other papers such as filling the shortage in supply or providing alternatives at reasonable prices, and spreading the culture of buying only basic needs, and construction As much as needed, and to stay away from speculation in the next stage, in order to reap the fruits of economic solutions, especially those related to real estate prices.
* Vice President of the Kuwaiti Federation
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