Bahrain expects $3.2bn deficit in 2021, 5% economic growth

Bahrain expects $3.2bn deficit in 2021, 5% economic growth
A shopkeeper counts his daily cash in Bahraini dinars as he opens his shop in downtown Manama, Bahrain, June 27, 2018. (Reuters)
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Updated 03 March 2021

Bahrain expects $3.2bn deficit in 2021, 5% economic growth

Bahrain expects $3.2bn deficit in 2021, 5% economic growth
  • Bahrain’s economy contracted by 5.4% last year, the IMF estimated, as the COVID-19 pandemic hurt vital sectors such as energy and tourism
  • The tiny Gulf state, which based the 2021-2022 budget on an oil price assumption of $50 a barrel, expects the economy to grow 5% this year

DUBAI: Bahrain expects to post a deficit of 1.2 billion dinars ($3.20 billion) in 2021, state news agency BNA said, citing the finance ministry.
The oil-producing Gulf state projected a budget of 3.6 billion dinars for 2021 with revenues expected to amount to 2.4 billion dinars, BNA said.
For next year, total expenditure is estimated at 3.57 billion dinars, against total revenues of 2.46 billion dinars, resulting in a slightly lower deficit of 1.1 billion dinars.
Bahrain’s economy contracted by 5.4% last year, the International Monetary Fund (IMF) has estimated, as the COVID-19 pandemic hurt vital sectors such as energy and tourism.
The tiny Gulf state, which based the 2021-2022 budget on an oil price assumption of $50 a barrel, expects the economy to grow 5% this year, BNA said late on Tuesday.
Sovereign wealth fund Mumtalakat will double its contributions to government revenues, said the agency, as Bahrain seeks to boost non-oil revenues.
Bahrain has accumulated a large pile of debt since the 2014-2015 oil price shock. In 2018 it received a $10 billion financial aid program from Gulf allies that helped it avoid a credit crunch.
BNA cited Finance and Economy Minister Sheikh Salman bin Khalifa Al-Khalifa as saying that the country remains committed to achieving the objectives of the fiscal balance program — a set of fiscal reforms linked to the financial aid.
“This budget makes clear Bahrain’s continued commitment to the Fiscal Balance Program, despite the unprecedented challenges of COVID-19, with core government expenditure remaining under tight control,” the minister was quoted as saying.
Public debt rose to 133% of GDP last year from 102% in 2019, the IMF has said, cautioning that the country needs to reduce government debt once economic recovery from the coronavirus crisis firms up.


World’s first fully Islamic Shariah-compliant digital bank launched in UAE

World’s first fully Islamic Shariah-compliant digital bank launched in UAE
Updated 37 min 37 sec ago

World’s first fully Islamic Shariah-compliant digital bank launched in UAE

World’s first fully Islamic Shariah-compliant digital bank launched in UAE
  • Long-term, the lender aims to scale up operations worldwide via strategic partnerships with banks and financial institutions

DUBAI: The UAE is set to be home to the world’s first fully Islamic Shariah-compliant digital bank, it was announced on Wednesday.

Set up by Zurich Capital Funds Group and branded as RIZQ / BARAKA, the new lender will provide all banking services according to Islamic law.

It will operate all digital banking services through mobile phones and computers, and its app can be downloaded via Apple Store, Google Play (Android stores), and many communication sites and social media networks.

RIZQ / BARAKA is launched from the UAE but aims to target customers in the Middle East and North Africa.

Long-term, the lender aims to scale up operations worldwide via strategic partnerships with banks and financial institutions in India, Azerbaijan, Uzbekistan, Indonesia, Malaysia, the UK, Australia, Brazil and Mauritania.

Dr. Fahed Al-Merhebi, chairman of Zurich Capital Funds Group, said the bank is the latest in its digital ambitions, having already launched a Shariah-compliant digital crypto exchange platform called the SUSTAIN EXCHANGE, and a range of sports digital currencies that were listed on the exchange.

Earlier this month, Dubai businessman Mohamed Alabbar announced that he is to lead a new digital bank set to be launched soon in the UAE.

Zand is being billed as “the world’s first combined digital corporate and retail bank,” and is going through final approvals ahead of its launch.

Alabbar, founder of Emaar Properties — the Dubai developer behind The Dubai Mall and Burj Khalifa — teamed up with Saudi Arabia’s Public Investment Fund to launch the Noon online shopping platform in 2017. He will take on the role of chairman of Zand.

“The UAE combines progressive regulations with commercial, financial, and technology hubs. This provides the perfect environment for a world-leading digital bank that can launch in the UAE and scale beyond,” Alabbar said.

“As the first fully independent digital bank in the country, with a full UAE banking license, Zand will provide innovative, effective financial solutions that help simplify businesses and lives, addressing the needs of both retail and corporate customers.”

Online banking has become increasingly popular in the UAE. In a survey by the Boston Consulting Group (BCG) last October, 70 percent of respondents said they are actively searching for a new bank, and 87 percent said they would be willing to open an account with a branchless digital-only lender.


Dubai to build Gulf’s first blockchain-backed precious metals refinery

Dubai to build Gulf’s first blockchain-backed precious metals refinery
Updated 52 min 7 sec ago

Dubai to build Gulf’s first blockchain-backed precious metals refinery

Dubai to build Gulf’s first blockchain-backed precious metals refinery
  • The facility will refine and store precious metals including gold, silver, platinum, palladium and rhodium

DUBAI: The Dubai Multi Commodities Centre (DMCC), a free zone authority in the emirate, has completed a deal that involved plans for a precious metals refinery and storage facility enabled by blockchain technology – the first in the region.
The facility will refine and store precious metals including gold, silver, platinum, palladium and rhodium, which will be tokenized on goldexchange.com, a secure trading platform, it said in a statement.
“Blockchain technology can enable more transparent and accurate tracking of precious metals, ensuring there is no ‘dirty gold’ in circulation and illicit trades,” REIT Development CEO Mike De Vries said.
REIT Development acquired industrial land in DMCC’s Jumeirah Lake Towers, where the 100,000 square feet facility will be built and is expected to open in the last quarter of 2022.
The facility will create a decentralized record of all transactions, making it possible to track all precious metals that are refined and eventually sold to over 150 countries.


Saudi trade name requests jump amid signs of FDI rebound

Saudi trade name requests jump amid signs of FDI rebound
Updated 21 April 2021

Saudi trade name requests jump amid signs of FDI rebound

Saudi trade name requests jump amid signs of FDI rebound
  • Requests for trade names increased by 19 percent in the first quarter of 2021

RIYADH: Saudi commercial chiefs have reported a rise in trade name requests, the latest indicator of a rebound in business activity in the Kingdom.
Requests for trade names increased by 19 percent in the first quarter of 2021, compared to a year earlier, SPA reported.
The Ministry of Commerce received 78,056 requests for trade names in the first quarter of 2021, compared to 65,716 requests a year earlier.
Most of the applications were for restaurants, cafés, contracting and foodstuffs activities — an encouraging sign from sectors that have been especially hit hard by the pandemic.
The rollout of vaccines across the Gulf states is helping businesses in some sectors get back to normal, however continued travel restrictions and the resurgence of the COVID-19 coronavirus in countries such as India has tempered earlier expectations of a strong and swift global recovery.
Still, there are also sign of rebounding foreign direct investment activity.
Sovereign AEI, a company that assists foreign investors establish a presence in the country, has also reported an increase in activity and expects to record a 50 percent rise in registrations at the Ministry of Investment of Saudi Arabia this year.
“The Saudi market presents tremendous opportunities,” said Paul Arnold, managing director of Sovereign Saudi Arabia. “We continue to see a growing interest and increasing shift of client focus toward KSA, as the country continues to unveil new strategic initiatives.”
The Kingdom has accelerated efforts to attract foreign investment this year as the pandemic created new challenges for regional economies seeking to diversify, modernize and create jobs for citizens.
In February the government announced it would stop signing contracts with foreign companies from 2024 unless their regional headquarters were based in the Kingdom.


UAE overtakes China in $17bn US treasuries purchase

UAE overtakes China in $17bn US treasuries purchase
Updated 21 April 2021

UAE overtakes China in $17bn US treasuries purchase

UAE overtakes China in $17bn US treasuries purchase
  • China bought $9 billion of treasuries in February
  • Monthly haul was biggest ever for UAE

RIYADH: The UAE bought more US treasuries than China in February, breaking with other top oil exporters in the Arabian Gulf that cut back on their exposure to one of the world’s safest assets, Bloomberg reported.
OPEC’s third-biggest producer raised its stockpile by almost 50 percent to $50.6 billion at the end of February, an increase of nearly $17 billion that made it the second-biggest buyer of the securities that month after the UK, according to the latest figures from the US Treasury Department.
The monthly haul was the biggest ever for the UAE, with no clear reasons.
The UAE may have built up enough of a buffer to commit the spare petrodollars toward the $21 trillion treasuries market, Bloomberg said.
The move took UAE holdings to levels last seen in 2019 before the global pandemic and the crash in oil prices put pressure on its finances. China bought $9 billion of treasuries in February to bring its total to $1.1 trillion, the highest since mid-2019.
Both Saudi Arabia and Kuwait were net sellers of treasuries in February.


Erdogan replaces Turkish trade minister, forms two new ministries

Erdogan replaces Turkish trade minister, forms two new ministries
Updated 21 April 2021

Erdogan replaces Turkish trade minister, forms two new ministries

Erdogan replaces Turkish trade minister, forms two new ministries
  • In a presidential decree Ruhsar Pekcan was replaced as trade minister by Mus, who has been a lawmaker for Erdogan’s AK Party since 2011

ISTANBUL: President Tayyip Erdogan appointed a prominent member of Turkey’s ruling AK Party, Mehmet Mus, as trade minister on Wednesday and split the Family, Labour and Social Policies Ministry into two ministries.
In a presidential decree Ruhsar Pekcan was replaced as trade minister by Mus, who has been a lawmaker for Erdogan’s AK Party since 2011 and served as the party’s deputy chairman in charge of the economy.
The decree, published in the Official Gazette, gave no reason for the change, but it comes after opposition politicians accused Pekcan’s ministry of buying supplies from her family-owned company and called on her to resign.
The Trade Ministry confirmed that the purchase of sanitisers had been made, but said in a statement on Tuesday the choice was based on price alone and not due to “the name of the company making the sale.”
It said that the sale, worth some 500,000 lira ($62,000), had been carried out in line with relevant regulations.
Erdogan’s overnight changes come amid speculation over a wider cabinet reshuffle, after he changed the country’s top economic management in November, including the central bank governor.
The president established two new ministries by splitting the Family, Labour and Social Policies Ministry into two separate ministries, according to the decree.
He appointed Derya Yanik as Family and Social Policies Minister and Vedat Bilgin as the Labour and Social Security Minister, replacing Zehra Zumrut Selcuk.