UK’s more positive growth forecast ; US to introduce a 'billionaires tax:' Economic wrap

UK’s more positive growth forecast ; US to introduce a 'billionaires tax:' Economic wrap
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Updated 27 October 2021

UK’s more positive growth forecast ; US to introduce a 'billionaires tax:' Economic wrap

UK’s more positive growth forecast ; US to introduce a 'billionaires tax:' Economic wrap

RIYADH: Britain’s economy is expected to grow by 6.5 percent in 2021, the country’s Chancellor of the Exchequer, Rishi Sunak, said in his Budget speech to parliament on Wednesday. This is a considerable revision from March’s forecast of 4 percent.

As for 2022, the economy is predicted to expand by a slightly lower 6 percent, the Chancellor added. 

The country’s inflation rate is also expected to average at 4 percent for the next year, up from the current 3.1 percent. This is driven by rising energy costs and supply shortfalls.

Moreover, Sunak announced that around £6 billion ($8.2 billion) will be delivered to the National Health Service as it struggles with the mounting number of Covid-19 patients in the country.

Germany’s economy forecasts

Meanwhile, Germany's economic growth forecast was sharply cut to 2.6 percent for 2021, down from April’s prediction of 3.5 percent, the German government said. 

This was mainly driven by distortions in the supply chain as well as hikes in energy prices.

However, the forecast for next year was favorably altered to 4.1 percent up from the former expectation of 3.6 percent, the government added.

The economy ministry also said in a statement that inflation is forecast to reach 3 percent in 2021 but will taper off in the coming years. This will be the highest level since 1993. Inflationary pressures in global energy prices and supply disruptions contributed to the rise in consumer prices.

Price inflation is expected to be 2.2 percent in 2022 and 1.7 percent in 2023.

US Senate introduces 'billionaires tax'

American billionaires are set to pay taxes on unrealized gains from their assets in order to finance Joe Biden’s social policy and climate change legislation, according to the top Senate Democrat for tax policy. 

The legislation is expected to cost about $1.5-2 trillion.

The so-called “billionaires tax” is a part of a wider plan that also includes an anticipated 15 percent minimum corporate tax rate on the country’s most profitable companies.

Canada’s interest rate decision

Canada’s central bank held its interest rate at 0.25 percent. This comes at a time when the country grapples with the highest inflation rate since February 2003. The annual rise in consumer prices sat at 4.4 percent in September.

Morocco enters the global debt market

To provide around 20 percent of Morocco’s financing needs in its 2022 budget, its government plans to enter the global debt markets, Asharq reported citing Morocco’s Minister of Economy and Finance.

Based on the 2022 pre-budget statement, the country needs around MAD105 billion ($11.6 billion) in financing. It also needs to petition the parliament in order to increase the government's external debt ceiling to MAD40 billion ($4.4 billion).

Meanwhile, the pre-budget statement also expects a rise in total public spending by 9 percent to reach MAD519 billion ($57.2 billion). Additionally, the budget deficit is predicted to slip next year to 5.9 percent of GDP from the 6.2 percent expected for this year, the government said last week.

Mexico’s trade deficit

The trade deficit in Mexico was $2.4 billion in September, falling from a surplus of $4.4 billion in the same month from last year, according to the country’s official statistics agency.

Imports to the country leaped by 29.1 percent to $44.1 billion, driven by purchases of intermediate goods and consumer goods which grew by 28.6 percent and 35.9 percent respectively.

This was accompanied by a lower growth in exports which rose by 8.2 percent only to reach $41.7 billion. The increase was largely accounted for by a 5.9 percent jump in non-oil exports as well as a 6.1 percent rise in exports of manufactured products.

Brazil’s unemployment

Brazil's unemployment rate fell to 13.2 percent in the three months ending in August, down from 13.7 percent in May-July, official data revealed. This is the lowest unemployment level since May 2020.

In addition, the country’s participation rate rose to 58.6 percent.


Aramco announces collaboration with French companies including hydrogen cars deal with Gaussin

Aramco announces collaboration with French companies including hydrogen cars deal with Gaussin
Updated 04 December 2021

Aramco announces collaboration with French companies including hydrogen cars deal with Gaussin

Aramco announces collaboration with French companies including hydrogen cars deal with Gaussin
  • Gaussin to explore manufacturing of hydrogen vehicles in Saudi Arabia
  • Aramco sponsors first hydrogen-fueled truck to compete in Dakar Rally

JEDDAH: Saudi Aramco on Saturday signed five agreements with leading French companies including an agreement to explore a hydrogen-powered vehicle business with Gaussin, said a statement.

The signing was held during an event in Jeddah, organized by the Ministry of Investment to explore investment opportunities for French companies in Saudi Arabia. 

Commenting on the deal with Gaussin, a pioneer in clean and intelligent transport solutions, Saudi Aramco CEO Amin Nasser said: “It represents an opportunity to promote hydrogen as a low-carbon solution, not just for motorsport, but eventually for mass transportation as well. Such collaboration helps us to advance economic growth in the Kingdom as part of the Namaat industrial investment program and takes us a step closer to our shared vision of a more sustainable future.”

The agreement aims to establish a modern manufacturing facility for on-road and off-road hydrogen powered vehicles in the Kingdom. The two companies will study the feasibility of a manufacturing facility and a hydrogen distribution business to serve the Middle East region.

The two companies also agreed that Aramco’s Advanced Innovation Center (LAB7) will be closely involved in Gaussin’s development of hydrogen-powered vehicles and the development of a remote controlled/autonomous hydrogen racing truck. LAB7 aims to integrate Aramco’s composite materials into Gaussin’s existing range of products to reduce the weight, energy consumption and cost of these vehicles.

Aramco will also be sponsoring the world’s first hydrogen-fueled racing truck, which has been developed by Gaussin and which will compete in the 2022 Dakar Rally in Saudi Arabia. Aramco’s sponsorship of Gaussin’s participation in the Dakar Rally continues to promote low-emission transportation technology developments.

Additional MoU’s

Other agreements announced on Saturday seek to further Aramco’s research and development in the areas of carbon capture technology, artificial intelligence and local manufacturing. The MoUs include:

  • Air Liquide – Non-binding MoU to evaluate low Carbon hydrogen and ammonia production, logistics, and backcracking technology and an additional non-binding MoU to evaluate Carbon Capture and Sequestration opportunities.
  • Alteia – Non-binding MoU to develop advanced artificial intelligence driven geospatial imagery interpretation and processing capabilities in the Kingdom of Saudi Arabia.
  • Axens – non-binding MoU to explore the local manufacturing and maintenance services of furnaces and fired heaters.

SAMI launches JV with French firm to build aerostructure components in Kingdom

SAMI launches JV with French firm to build aerostructure components in Kingdom
Updated 04 December 2021

SAMI launches JV with French firm to build aerostructure components in Kingdom

SAMI launches JV with French firm to build aerostructure components in Kingdom

JEDDAH: The Saudi Arabian Military Industries, a wholly owned subsidiary of the Public Investment Fund, on Saturday launched a joint venture with French company Figeac Aero and the Saudi Arabian Industrial Investments Co., Dussur, to build a high-precision manufacturing facility in the Kingdom to produce aerostructure components, SAMI said on Saturday.

The company said that the joint venture’s revenue would reach $200 million by 2030 and the ownership would be divided among the two countries. Fifty-one percent would be owned by Saudi Arabia and 49 percent by France.

SAMI also signed an agreement with Airbus to form a joint project specialized in military aviation services and maintenance, the statement said. As per the deal, the Kingdom would own 51 percent of the joint venture with the European planemaker holding the other 49 percent.

 

Aviation deals

Saudi Arabian Airlines signed an agreement with CFM International worth $8.5 billion at list prices, the carrier said in a statement.

The state-owned carrier, also known as Saudia, said “it has ordered CFM International LEAP-1A engines to power its new fleet of 35 Airbus A321neo and 30 A320neo aircraft.”

Low-cost Saudi airline flynas also signed an agreement with CFM International to maintain LEAP-1A engines in a deal valued at $4 billion, the Saudi Arabian budget carrier said.


Egypt to increase cotton gins capacity, says official report

Egypt to increase cotton gins capacity, says official report
Updated 04 December 2021

Egypt to increase cotton gins capacity, says official report

Egypt to increase cotton gins capacity, says official report

RIYADH: Egypt aims to increase cotton gins capacity to 4.4 million kantars annually up from 1.5 million kantars, according to a government report issued on Saturday.

A kantar is the official Egyptian weight unit for measuring cotton. It corresponds to the US hundredweight, and is roughly equal to 99.05 pounds, or 45.02 kg. It is equal to either 157 kg of seed cotton or 50 kg of lint cotton.

The Egyptian government is trying to breath a new life into the country’s textile industry, which contributes almost 3 percent to the gross domestic product, employs one-third of the industrial labor and generates exports worth $2.6 billion annually. 

According to reports, the country’s cotton production rose by 30 percent during 2021.

Egypt increased the cultivated area this year to 236,000 feddans (one feddan equals 1.038 acres or 0.42 hectare) compared to 182,000 feddans last year.

In its annual report on Egypt’s cotton on March 31, 2021, the US Department of Agriculture said that “cotton area harvested in Egypt was forecast to increase seven percent to 70,000 hectares (ha), from 65,000 ha in MY 2020/21.” It added that Egypt’s production is estimated to increase to 250,000 bales this year compared to 215,000 bales in the previous year.


Bitcoin falls by a fifth, cryptos see $1bn worth liquidated

Bitcoin falls by a fifth, cryptos see $1bn worth liquidated
Updated 04 December 2021

Bitcoin falls by a fifth, cryptos see $1bn worth liquidated

Bitcoin falls by a fifth, cryptos see $1bn worth liquidated

NEW YORK: Bitcoin shed a fifth of its value on Saturday as a combination of profit-taking and macro-economic concerns triggered nearly a billion dollars worth of selling across cryptocurrencies.

Bitcoin was 12 percent down at 0920 GMT at $47,495. It fell as low as $41,967.5 during the session, taking total losses for the day to 22 percent.

The broad selloff in cryptocurrencies also saw ether, the coin linked to the ethereum blockchain network, plunge more than 10 percent.

Based on cryptocurrency data platform Coingecko, the market capitalization of the 11,392 coins it tracks dropped nearly 15 percent to $2.34 trillion. That value had briefly crossed $3 trillion last month, when bitcoin hit a record $69,000.

The plunge follows a volatile week for financial markets. Global equities and benchmark US bond yields tumbled on Friday after data showed US job growth slowed in November and the omicron variant of the coronavirus kept investors on edge.

Justin d'Anethan, Hong Kong-based head of exchange sales at cryptocurrency exchange EQONEX, said he had been watching the increase in leverage ratios across the cryptocurrency markets as well how large holders had been moving their coins from wallets to exchanges. The latter is usually a sign of intent to sell.

“Whales in the crypto space seem to have transferred coins to trading venue, taken advantage of a bullish bias and leverage from retail traders, to then push prices down,” he said.

The selloff also comes ahead of testimony by executives from eight major cryptocurrency firms, including Coinbase Global CFO Alesia Haas and FTX Trading CEO Sam Bankman-Fried, before the US House Financial Services Committee on Dec. 8.

The hearing marks the first time major players in the crypto markets will testify before US lawmakers, as policymakers grapple with the implications of cryptocurrencies and how to best regulate them.

Last week, the US Securities and Exchange Commission (SEC) rejected a second spot-bitcoin exchange-traded fund proposal from WisdomTree.

Data from another platform Coinglass showed nearly $1 billion worth of cryptocurrencies had been liquidated over the past 24 hours, with the bulk being on digital exchange Bitfinex.

A plunge in bitcoin funding rates — the cost of holding bitcoin via perpetual futures which peaked at 0.06 percent in October — also showed traders had turned bearish.

The funding rate on cryptocurrency trading platform BitMEX fell to a negative 0.18 percent from levels of 0.01 percent for most of November.


Saudi, French firms sign 27 MoUs as Macron visits the Kingdom

Saudi, French firms sign 27 MoUs as Macron visits the Kingdom
Updated 04 December 2021

Saudi, French firms sign 27 MoUs as Macron visits the Kingdom

Saudi, French firms sign 27 MoUs as Macron visits the Kingdom

JEDDAH: A group of leading Saudi and French companies signed 27 memorandum of understanding at an investment forum in Jeddah as French President Emmanuel Macron met with Crown Prince Mohammed bin Salman today during his official trip to the Gulf region, where he is visiting Saudi Arabia, the UAE and Qatar between Dec. 3 and 4.

Around 101 Saudi companies and 84 French companies attended six workshops at the forum, which was opened by Khalid Al Falih, Minister of Investment, Saudi Arabia and Franck Riester, Minister Delegate for Foreign Trade and Economic Attractiveness.

"The memorandums of understanding signed today were a cause for optimism and satisfaction," Al Falih said in a tweet after the event.

Represenatives of French companies and banks including EDF Renewables, Engie, Sanofi, and BNP Paribas are meeting with chairmen and CEOs of leading Saudi firms including ACWA Power, Banque Saudi Fransi, Riyad Bank, and Saudi Military Industries Co. Officials from the Public Investment Fund and Royal Commission of AlUla among others are also participating in the forum. 

 

Below is the agenda for the one-day forum: