Lego to build up presence in Mideast with Dubai office

Lego sees growth potential in the Middle East. (AP)
Updated 07 March 2018
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Lego to build up presence in Mideast with Dubai office

LONDON: The Danish toy company Lego is planning to ramp up growth in the Middle East with the opening of an office in Dubai toward the end of this year, according to the company’s CEO Niels Christiansen. 
“The market there is already big, it is already growing … We believe we can accelerate that by now putting people on the ground in Dubai who can develop the region further,” he said at a press conference on March 6.
His comments come as the toy brick-maker announced that its 2017 profits were down compared to the previous year, with full-year net profit dropping to 7.8 billion Danish kroner ($1.3 billion) compared to 9.4 billion kroner in 2016. 
Revenues decreased by 8 percent to 35 billion kroner in 2017 compared to 37.9 billion kroner last year.
The reduced revenues were partly blamed on too much inventory already sitting in shops and warehouses that needed to be sold off. Global consumer sales were flat in 2017, moving upward in the final months of the year benefiting from the Christmas season. 
“2017 was a challenging year and overall we are not satisfied with the financial results,” Christiansen said. 
“However, we ended the year in a better position. In December, consumer sales grew in seven of our 12 largest markets and we entered 2018 with healthier inventories. In 2018, we will stabilize the business and invest to build sustainable growth in the longer term,” he said. 
He said there was “no quick-fix” to the company’s fortunes. “It will take some time to achieve longer-term growth,” he said. 
While revenues declined in the company’s established markets of North America and Europe, Lego saw “significant” revenue growth in China. 
The company is planning to further expand in the country, and last year signed a partnership deal with one of the country’s largest Internet companies, Tencent, to work together to develop online games for Chinese children.


IMF urges Lebanon to make ‘immediate and substantial’ fiscal adjustment

Updated 22 June 2018
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IMF urges Lebanon to make ‘immediate and substantial’ fiscal adjustment

  • Lebanon’s debt to GDP ratio is the third largest in the world
  • Donor states and institutions are looking to Lebanon to implement the reforms in order to release billions of dollars worth of financing pledged at a conference in Paris in April

BEIRUT: Lebanon requires “an immediate and substantial” fiscal adjustment to improve the sustainability of public debt that stood at more than 150 percent of gross domestic product (GDP) at the end of 2017, the IMF executive board said.
An IMF statement released overnight said IMF executive directors agreed with the thrust of a staff appraisal which in February urged Lebanon to immediately anchor its fiscal policy in a consolidation plan that stabilizes debt as a share of GDP and then puts it on a clear downward path.
Lebanon’s debt to GDP ratio is the third largest in the world.
“Directors stressed that an immediate and substantial fiscal adjustment is essential to improve debt sustainability, which will require strong and sustained political commitment,” the IMF executive board statement said.
It reiterated estimates of low economic growth of 1-1.5 percent in 2017 and 2018. “The traditional drivers of growth in Lebanon are subdued with real estate and construction weak and a strong rebound is unlikely soon,” it said.
“Going forward, under current policies growth is projected to gradually increase toward 3 percent over the medium term.”
Lebanon’s economy has been hit by the war in neighboring Syria. Annual growth rates have fallen to between 1 and 2 percent, from between 8 and 10 percent in the four years before the Syrian war. Two former pillars of the economy, Gulf Arab tourism and high-end real estate, have suffered.
Caretaker Prime Minister Saad Hariri has been designated to form a new government following parliamentary elections last month, Lebanon’s first since 2009, and has stressed the need for the state to see through long-delayed economic reforms.
Donor states and institutions are looking to Lebanon to implement the reforms in order to release billions of dollars worth of financing pledged at a conference in Paris in April. In Paris, Hariri promised to reduce the budget deficit as a percentage of GDP by five percent over five years.
The directors “noted that a well-defined fiscal strategy, including a combination of revenue and spending measures, amounting to about 5 percentage points of GDP, is ambitious but necessary” to stabilize public debt and put it on a declining path over the medium term.
They recommended increasing VAT rates, restraining public wages, and gradually eliminating electricity subsidies. Last year the government spent $1.3 billion subsiding the state power provider — 13 percent of primary expenditures.