IMF cuts global growth rate forecast for 2021, keeps its 2022 forecast unchanged: Economic wrap

IMF cuts global growth rate forecast for 2021, keeps its 2022 forecast unchanged: Economic wrap
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Updated 12 October 2021

IMF cuts global growth rate forecast for 2021, keeps its 2022 forecast unchanged: Economic wrap

IMF cuts global growth rate forecast for 2021, keeps its 2022 forecast unchanged: Economic wrap

The IMF has slightly revised down its GDP growth forecast for 2021 to 5.9 percent from the previously reported 6 percent. The international organization cited supply chain problems and mounting inflationary pressures as obstacles that might hold back the global economy’s recovery. 

While the downgrade might seem a slight change, the IMF said in its report that “the outlook for the low-income developing country group has darkened considerably due to worsening pandemic dynamics.”

The report also mentioned the disparities in economic outlooks between different countries as low-income countries risk facing lower growth and more poverty as well as significantly weaker vaccination rates.

The global growth forecast for 2022 remained unchanged at 4.9 percent.

The United States had a considerable downgrade for its 2021 growth forecast as it was reduced from 7 percent to 6 percent.

China’s forecast was reduced for both 2021 and 2022 to 8 percent and 5.6 percent respectively while the eurozone forecast was upgraded to 5 percent for 2021, up from the previous projection of 4.6 percent.

UAE Inflation 

The United Arab Emirates Consumer Price Index had an annual increase in August as it turned positive for the first time in 13 months. It stood at 0.55 percent in August, following a decline of 0.02 percent in the previous month. 

Prices of entertainment and culture services, as well as educational services, experienced the highest annual inflation.

Egyptian trade balance 

Egypt's trade balance deficit declined by 14.6 percent in July to reach $2.88 billion, compared to $3.37 billion in the same month last year, according to the Central Agency for Public Mobilization and Statistics. 

Exports leaped by a 31.5 percent annual growth rate. Plastics and ready-made clothing exports saw the highest growth, rising by 58 percent and 23.3 percent respectively.

UK unemployment

Data from the Office for National Statistics showed that the UK unemployment rate fell to 4.5 percent in the June-to-August period, the lowest in a year, as the labor market continued to recover.

However, the rate remained 0.5 percentage points higher than it was pre-pandemic.

South Korean interest rate

Korea’s Central Bank kept the country’s interest rate unchanged at 0.75 percent in its October meeting. However, it is possible that policy will tighten in November as policymakers might grapple with rising inflation and household debt.

Industrial production

Turkey’s industrial production has grown by an annual rate of 13.8 percent in August, compared to 9.7 percent in July, according to the Turkish Statistical Institute. Capital goods and intermediate goods grew at the highest rates as they increased by 20.5 percent and 15.4 percent respectively.

Meanwhile, Mexico’s industrial production continued its positive course as it grew by a yearly rate of 5.5 percent in August. However, this is the fifth consecutive month where growth has fallen down as last year's low base effects start to lose importance. The increase in production was mainly driven by an 8.7 percent growth rate in construction and an annual increase of manufacturing by 6.6 percent, official data revealed.

India’s industrial production also saw an increase of 11.9 percent in August, a slightly higher rate than the 11.5 percent recorded in the previous month. Mining and electricity largely induced this output growth according to Ministry of Statistics and Programme Implementation data.

Malaysian government data showed that the country’s industrial production declined at an annual rate of 0.7 percent in August, continuing its contractionary trend albeit at a smaller rate. In July, industrial production fell by 5.1 percent. While manufacturing output rose by 0.6 percent in August, electricity and mining activity shrank by 4.8 percent and 4.2 percent respectively.

Russian Inflation 

Russia expects inflation to increase in 2021 to 7.4 percent from the previous forecast of 5.8 percent, the economy minister said. This puts more pressure on the central bank for the sixth time this year to increase interest rates. Jumps in food prices are the main drivers of this predicted upswing.


Saudi insurer MEDGULF to increase capital by 50% to $279mn for more solvency

Saudi insurer MEDGULF to increase capital by 50% to $279mn for more solvency
Updated 21 sec ago

Saudi insurer MEDGULF to increase capital by 50% to $279mn for more solvency

Saudi insurer MEDGULF to increase capital by 50% to $279mn for more solvency
  • The company plans to increase its capital from SR700 million ($186.6 million) to SR1.050 billion ($279.9 million)

RIYADH: The Mediterranean and Gulf Insurance and Reinsurance Company (MEDGULF) plans to increase its capital by 50 percent to boost its solvency and leverage business expansion opportunities.

The company plans to increase its capital from SR700 million ($186.6 million) to SR1.050 billion ($279.9 million), by offering 35 million new ordinary shares through a rights issue at an offer price of SR12 , and a nominal value of SR10 per share, a statement revealed.

Up to 15.9 percent of the offering proceeds will be invested in information technology applications with focus on business development, sales generation and customer service, the company noted in the offering prospectus.

MEDGULF received approval on the capital increase from the Saudi Central Bank in June 2021 and from Saudi Capital Market Authority (CMA) in September 2021. The company will have its extraordinary general assembly meeting on November 3rd to discuss the offering plans further.

MEDGULF is a major player in the Saudi insurance industry with health insurance being the largest business division, representing 72 percent of gross premiums as on December 31, 2020, followed by motor insurance at 17 percent and general insurance at 11 percent.


Desperate for employees, US businesses struggle to hire

Desperate for employees, US businesses struggle to hire
Updated 24 October 2021

Desperate for employees, US businesses struggle to hire

Desperate for employees, US businesses struggle to hire
  • More than 10 million jobs were unfilled as of the end of August, according to government data

NEW YORK: To keep the taps at his recently opened beer tasting room flowing, Peter Chekijian had no choice but to ask his main employees to come in seven days per-week.
The staffing shortage has also kept Chekijian from realizing his goal of brewing beer on site, since he can’t find contractors to finish installing tanks he requires.
“That’s been a big issue of getting people to actually finish up the job,” said Chekijian, who co-founded the small Twin Fork Beer Company in New York state.
Even as millions of Americans who lost their jobs to the Covid-19 pandemic have returned to work, companies nationwide report they’re still struggling to hire employees in recent months.
More than 10 million jobs were unfilled as of the end of August, according to government data. The labor force participation rate, which measures the US economy’s active workforce, was 61.6 percent in September, compared to 63.3 percent before the pandemic.
The causes of the short staffing are myriad, from continued fears of contracting Covid-19, particularly among people who live with elderly family or children, to early retirements and objections over work-life balance and low wages.
And while the government throughout the pandemic offered generous unemployment benefits to keep people who lost their job financially sound, their expiration last month hasn’t yet caused hiring to increase.

The employee shortages come as restaurants and entertainment venues reopen amid as more Americans get vaccinated, and ahead of the uptick in business around the holiday season.
With “so many employers trying to hire so many people at the same time, it creates that imbalance,” said Aaron Sojourner, an economist at the University of Minnesota.
Employers who spoke to AFP told of mad scrambles to attract applicants by offering higher wages and other perks.
Chekijian has put out ads looking for employees and attended job fairs with offers of time off, benefits packages and salaries as generous as he can manage, but still can’t find the people he needs.
“It’s been shockingly slow,” he said. “It’s definitely affecting what we’re trying to do in terms of growing our business.”
The biggest American retailers are hiring staff ahead of the holiday season, with Amazon and Walmart both recruiting 150,000 people, Target and UPS taking on 100,000 and FedEx 90,000.
Logistics company GXO is looking to hire 9,000 employees for the busy season over the next two months, and its head of human resources Maryclaire Hammond said “finding people has been a huge issue.”
“There is a massive competition for talent at all levels, there is an absolute war,” she said in an interview.

GXO is particularly short on material handlers and forklift operators, and has paid for billboards and social media advertisements and organized job fairs to attract applications.
It has upped its pay by $3 to $5 per-hour in the past eight months and offered hiring incentives and a benefits package including health insurance, retirement contributions and college tuition assistance.
But Hammond said getting people to stay is even trickier.
“The current workforce is pretty fickle, happy to change,” she said. If a warehouse nearby pays even slightly more, employees will move there.
The company has tried to make workers feel comfortable, even going so far as to hand out burritos at some warehouses.
“Offering very good burritos in the mornings, it sounds silly, but things like that really motivate people,” Hammond said.
It has also tried to find ways around the worker shortages by increasing automation in its warehouses by 40 percent this year.
Staci Weinsheimer is looking for a full-time administrative job and feels that the market is finally turning in her favor.
“I’m getting a lot of interviews, I’m getting a lot of great feedback from the employers,” she said after meeting with hospitality companies at a job fair in Melville, New York.
Some job seekers still struggle to find work, or question whether companies will treat them well.
“Employers could be spending more money to attract new hires, and to improve working conditions. Those who do that find it easier to hire,” Sojourner, the University of Minnesota economist, said.
He added: “But a lot of employers are reluctant to really raise wages, because that does come out of their profits, and then the incumbent employees might also want a raise.”
 


World leaders, environmentalists welcome Saudi Green Initiative

World leaders, environmentalists welcome Saudi Green Initiative
Updated 24 October 2021

World leaders, environmentalists welcome Saudi Green Initiative

World leaders, environmentalists welcome Saudi Green Initiative

CAIRO: The Saudi Green Initiative launched by Crown Prince Mohammed bin Salman was widely welcomed by world leaders and leading environmentalists.
The SGI aims to eliminate 278 million tons of carbon dioxide emissions per year by 2030, up from a previous target of 130 million tons. The crown prince said the SGI initiative would involve investments of over SR700 billion ($190 billion) in that time period.

In a video message played at the forum on Saturday, Prince Charles said: “We have already seen great progress, which Saudi and Middle East green initiatives will accelerate.” 
“We now have a dangerously narrow window of opportunity to accelerate climate change action,” the prince of Wales added. 
Boris Johnson tweeted: “Saudi Arabia’s landmark pledge to reach net zero emissions by 2060 is a major step forward.”

Marco Lambertini, director general of WWF International stressed the need to agree on a global goal for nature as “we have for climate — we need to talk about net positive biodiversity.”
“Only 20 percent of the companies within the G20 countries have climate targets,” said Sanda Ojiambo, CEO and executive director of the UN. 
“We are all committed to lowering carbon emissions — each country with its own implementation program,” Tarek El-Molla, Egypt’s minister of petroleum and mineral resources said. 
US climate envoy John Kerry is due to attend a wider Middle East green summit in Riyadh on Monday.

“An initiative of the (Saudi) crown prince, the summit is the first of its kind in the Middle East region,” the Pakistan’s Prime Minister Office said in a statement said.
Imran Khan is visiting Saudi Arabia to attend the launch of “the Middle East Green Initiative Summit” in Riyadh.


SABIC announces carbon neutrality strategy at inaugural Saudi Green Initiative forum

SABIC announces carbon neutrality strategy at inaugural Saudi Green Initiative forum
Updated 23 October 2021

SABIC announces carbon neutrality strategy at inaugural Saudi Green Initiative forum

SABIC announces carbon neutrality strategy at inaugural Saudi Green Initiative forum
  • SABIC and 10 peer companies will work together to share early-stage risks and co-invest in developing and upscaling LCETs

RIYADH: SABIC unveiled its global strategy towards carbon neutrality at the inaugural Saudi Green Initiative in Riyadh on Saturday.

The event was attended by a high-level delegation from the company who joined international heads of state and global leaders of business, finance, and civil society to discuss Saudi Arabia’s vision for tackling environmental challenges.

SABIC chairman, Khalid Hashim Al-Dabbagh, said: “The SGI provides an ambitious framework aimed towards the shared goal of achieving a green future. SABIC is an active contributor to several strategic initiatives announced today, including those geared towards the production of hydrogen, reusing captured carbon, and recycling plastics.”
He added: “At SABIC, we recognize the power of collaboration to improve and protect the quality of life for the next generations. Sustainability is in our DNA and we’re pleased to contribute innovative technologies that will accelerate our journey towards carbon neutrality.”

SABIC’s Vice Chairman and CEO Yousef Al-Benyan joined an industry panel at the event to discuss the scaling up of new technologies and reasserted the company’s global commitment to reduce greenhouse gas emissions and pursue carbon neutrality. 

He said that “SABIC is uniquely contributing to the SGI goals and taking bold actions that support the Kingdom’s ambitions for the circular carbon economy. Our global carbon neutrality strategy reaffirms our commitment to the Paris Agreement goals and the continuous pursuit of solutions that can reduce greenhouse gas emissions.”

He added: “Many countries are competing for position as the world looks to broaden its energy mix and reduce carbon emissions. The foresight of Vision 2030, our abundant renewable resources and the innovative advances made by Saudi Arabian companies are making circularity a reality, placing the Kingdom in pole position to lead the new energy revolution.”

During the session, he outlined SABIC’s key circular innovations and collaborative efforts to transform energy intensive industry towards renewables, and being a founding member of the Low Carbon Emitting Technologies (LCET) initiative with the World Economic Forum. 

In this collaboration, SABIC and 10 peer companies will work together to share early-stage risks and co-invest in developing and upscaling LCETs.

SABIC is also partnering in the development of the world’s first large-scale chemical site to operate on 100 percent renewable power and, in a different project, developing solutions for electrically heated steam cracker furnaces which could reduce emissions by up to 90 percent.

Al-Benyan also highlighted some of the company’s accomplishments including the demonstration of the blue ammonia supply chain and the development of the world’s largest CO2 capture and purification plant. Based in Jubail and operational from 2015, the pioneering facility can process up to 500,000 megatons of CO2 per year into feedstock for industrial processes.

The company’s range of certified renewable polymers are providing an important bridge for the value chain to evolve from a linear to a circular economy and its landmark plastic chemical recycling processes contribute to CO2 reduction by preventing the incineration of plastic waste.


SGI offers immense opportunities in recycling, waste management sectors

SGI offers immense opportunities in recycling, waste management sectors
Updated 23 October 2021

SGI offers immense opportunities in recycling, waste management sectors

SGI offers immense opportunities in recycling, waste management sectors

RIYADH: The Saudi Green Initiative is a great opportunity to create new ways of managing our industries, said Mohammed Alibrahim, Saudi Arabia’s assistant minister for oil and gas.

Speaking at a panel discussed titled “Carbon-intensive industries: Transitioning fast, at scale” held in Riyadh on Saturday, he said the circular carbon economy is at the heart of the initiative.

He said before the launch of the green initiative, the Kingdom already embarked on an ambitious drive to improve energy efficiency in its industrial sector and achieved encouraging results. He said the chemicals, steel, and cement industries in the Kingdom have reduced emissions by about 4 million tonnes per annum.

The assistant minister said the new initiative offers several investment opportunities in recycling and waste management.

For example, he added, SABIC has already built a plant to capture 500,000 tons of carbon dioxide per annum, the gas is then purified and used to produce more chemicals and for many other purposes in different sectors, Alibrahim said.

He said the Saudi Green Initiative and the circle of carbon economy allow us to utilize carbon as a resource rather than looking at it as a problem.

“We have targets to product green hydrogen and blue hydrogen to convert it into blue ammonia, we already shipped ammonia to Japan last year and and we have a plan to expand on that.”

“We don’t want to focus on a certain type of technology.”

Paddy Padmanathan, CEO of ACWA Power, said: “The pathway is ultimately green hydrogen, the real need is energy and even that will be needing electricity, basic ingredient is already available.” 

He called on all stakeholders to create a supporting ecosystem.

“We can really transform industrial consumption when we bring hydrogen costs down to below $2 per kilo and it is achievable.”

Jasper Graf von Hardenberg, co-founder and group CEO of Daystar, US, said: “Saudi Arabia has bigger responsibility, it can become the world No.1 producer of green hydrogen.”

Morten Dyrholm, GSVP for MarCom, Sustainability and Public Affairs, Vestas Wind Systems A/S, Denmark, said: “With this plan Saudi Arabia is placing itself at the center and we want to be part of this journey.”

“As companies we need to take responsibilities with targets of net zero emissions through production.”

“Now with all policies coming up in Saudi Arabia there are signals that the Kingdom is heading to become more sustainable.”