‘Business is booming’ in euro zone

The EU recently upgraded its growth forecast for the euro zone to the highest level since 2007. (Reuters)
Updated 23 November 2017

‘Business is booming’ in euro zone

LONDON: The 19-country euro zone is set for its best quarterly performance since early 2011, according to a closely watched survey Thursday, the latest sign that a robust economy has gained further momentum heading into the year’s end.
Financial information company IHS Markit said its purchasing managers’ index — a broad gauge of business activity across the manufacturing and services sectors — rose to 57.5 points in November from 56 the previous month.
Anything above 50 indicates an expansion and the index now stands at its highest level since April 2011.
Chris Williamson, the firm’s chief business economist, said “business is booming,” and jobs are being created at the fastest rate since the dot-com era at the turn of the millennium.
The euro zone’s fourth-quarter growth could even come in at 0.8 percent, he said, rounding off “the best year for a decade.”
Even before the survey, the euro zone was set to post its highest growth rate in 10 years. Earlier this month, the EU upgraded its growth forecast for the euro zone this year to 2.2 percent, which would be the highest since 2007.
The scale of the euro zone recovery this year, which is broad-based across countries and sectors, has caught many economists by surprise.
At the year’s start, many feared that the region, already disturbed by Britain’s vote last year to leave the EU, ongoing concerns over the euro and a slew of key elections, would face a difficult time.
Though uncertainty over Brexit remains, the Greek crisis seems contained and populist politicians failed to make the breakthrough many economists feared during those elections, notably in France.
“The broad-based nature of the upturn, and the rate at which rising demand is feeding through to the labor market, suggests the euro zone will see a strong end to 2017 and enter 2018 on a firm footing,” said Williamson.
The strong growth and falling unemployment should in time help fuel price increases in the economy. That would be welcome news to the European Central Bank, which has enacted a series of stimulus measures over the past few years to get inflation up to its goal of just below 2 percent.
In the year to October, inflation stood at 1.4 percent and is expected to dip in the coming months as last year’s rise in energy prices falls out of the annual comparison.
However, IHS Markit said the faster pace of growth and jobs creation is helping to boost underlying inflation, with firms’ selling prices for goods and services rising by more than at any time since June 2011.

Saudi minister Al-Falih says Aramco IPO likely in 2019

Updated 25 May 2018

Saudi minister Al-Falih says Aramco IPO likely in 2019

  • Energy Minister Khalid Al-Falih: “We are ready, the company (Saudi Aramco) essentially has ticked all the boxes. We’re simply waiting for a market readiness for the IPO.”
  • Khalid Al-Falih: “Most likely it will be in 2019 but we will not know until the announcement has been made. All I could say is stay tuned.”

RIYADH: Saudi Arabia is most likely to hold the initial public offering (IPO) of oil giant Aramco in 2019, Energy Minister Khalid Al-Falih said on Friday, confirming a delay from the initial plan to list the company this year.

“The timing I think will depend on the readiness of the market, rather than the readiness of the company or the readiness of Saudi Arabia,” Khalid Al-Falih, who’s also the company’s chairman, said at the St. Petersburg International Economic Forum in Russia on Friday.

“We are ready, the company essentially has ticked all the boxes,” he said. “We’re simply waiting for a market readiness for the IPO.”

For almost two years, Saudi officials said the IPO was “on track, on time” for the second half of 2018. But for the first time in March they suggested it could be delayed until 2019.

“Most likely it will be in 2019 but we will not know until the announcement has been made,” Al-Falih said. “All I could say is stay tuned.”

The Aramco IPO would be a once-in-a-generation event for financial markets. Saudi officials said they hope to raise a record $100 billion by selling a 5 percent stake, valuing the company at more than $2 trillion and dwarfing the $25 billion raised by Chinese retailer Alibaba Group Holding Ltd. in 2014.